Worked Examples and Checklists
How to compare personal loan quotes: three offers worked through on total cost
A step-by-step comparison of three illustrative personal loan quotes for $18,000 over four years, including fees, fixed vs variable and an early payout scenario that changes the winner.
To compare personal loan quotes properly, convert each one into the total amount you would pay for your own loan amount and term, including the establishment fee, monthly fees and any early repayment fee you are likely to trigger, and then weigh features such as extra repayments. In the illustrative example below, three quotes for $18,000 over four years are within about $285 of each other over the full term, but if you pay the loan out after two years the cheapest becomes the most expensive. Ask for your personalised rate and comparison rate, and the full fee schedule, before you decide.
This guide is part of the personal loan requirements guide. The quotes are hypothetical, not offers from real lenders.
Step 1: Collect like-for-like quotes
Ask each lender or broker for a quote for the same amount and term. Where possible use quote tools that rely on a soft credit check, so you do not add several enquiries to your credit report. Record:
- interest rate and whether it is fixed or variable,
- comparison rate (and the benchmark it is based on),
- establishment fee and monthly fee,
- early repayment fee or break cost rules,
- extra repayment and redraw options,
- repayment frequency options.
Step 2: Put the quotes side by side
Loan: $18,000 over four years (48 months).
| Quote 1 | Quote 2 | Quote 3 | |
|---|---|---|---|
| Rate type | Fixed | Variable | Fixed |
| Interest rate | 10.9% | 9.9% | 12.4% |
| Establishment fee | $350 | $550 | $0 |
| Monthly fee | $0 | $10 | $0 |
| Early repayment fee | $300 in the first 3 years | None | None |
| Extra repayments | Up to a limit | Unlimited | Unlimited |
Step 3: Total cost over the full term
| Quote 1 | Quote 2 | Quote 3 | |
|---|---|---|---|
| Monthly repayment | about $464.35 | about $455.66 (+ $10 fee) | about $477.55 |
| Repayments over 48 months | about $22,289 | about $21,872 | about $22,922 |
| Establishment fee | $350 | $550 | $0 |
| Monthly fees | $0 | $480 | $0 |
| Total paid | about $22,639 | about $22,902 | about $22,922 |
| True annual cost including fees | about 11.9% | about 12.7% | 12.4% |
Over the full four years, Quote 1 is cheapest, although the three are close. Quote 2's lowest interest rate is cancelled out by its fees.
Step 4: Test an early payout
Suppose you expect to receive money and pay the loan out after two years. Cost of borrowing is total paid minus the $18,000 borrowed:
| Quote 1 | Quote 2 | Quote 3 | |
|---|---|---|---|
| Interest for 24 months | about $3,117 | about $2,820 | about $3,566 |
| Establishment fee | $350 | $550 | $0 |
| Monthly fees (24 months) | $0 | $240 | $0 |
| Early repayment fee | $300 | $0 | $0 |
| Cost of borrowing | about $3,767 | about $3,610 | about $3,566 |
Now Quote 3 is cheapest and Quote 1 is the most expensive, because its early repayment fee applies and the other quotes' upfront savings no longer have time to pay off. The interest figures are for the payments made plus the balance paid out at 24 months; see paying off a personal loan early for the method.
Step 5: Weigh features and risks
| Question | Why it matters |
|---|---|
| Can I make extra repayments without a fee? | Lets you cut interest if your income rises |
| Is the rate variable? | Quote 2's cost would rise if its rate increased |
| What happens if I miss a payment? | Compare late and dishonour fees |
| How does the lender handle hardship? | Check the hardship contact and process |
| Is insurance being added? | Remove optional add-ons you did not ask for |
A variable rate adds uncertainty: if Quote 2's rate rose by 1–2 percentage points during the term, it would fall further behind. See fixed vs variable personal loans.
Step 6: Decide and apply once
Choose the quote that is cheapest for your most likely scenario and has the features you value, then submit one full application. If you are declined, find out why before applying elsewhere; see what to do if your personal loan is declined.
Tools for your own comparison
- Personal loan repayment calculator — repayments, interest and total cost with the upfront fee
- Fee impact calculator — the dollar weight of establishment and monthly fees
- Fees vs rate worked example — why small loans are hit harder by fees
Frequently asked questions
How many quotes should I get?
Two or three like-for-like quotes are usually enough to see the range. More is useful only if each quote does not leave a credit enquiry on your report.
Should I just pick the lowest comparison rate?
It is a good first filter, but the benchmark may not match your loan, and it ignores early repayment fees and features. Calculate total cost for your own amount and term.
Can I ask a lender to match another quote?
You can ask. Some lenders will adjust the rate or fee for strong applicants, particularly existing customers. Get any offer in writing.
What if the formal offer differs from the quote?
A quote is an estimate. After a full assessment the lender may offer a different rate. You do not have to accept, and you can compare the formal offer again before signing.
Sources and where to check
- ASIC Moneysmart — comparing personal loans
- ASIC — check a lender or broker's credit licence on the professional registers
- Australian Financial Complaints Authority — disputes about loan terms
