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New Zealand Personal Loan Calculator

Free NZ personal loan calculator. Repayments and total interest on a personal loan at a given rate and term.

Published

Personal loan repayments and total interest.

Monthly repayment

Total interest

Total repaid

Your breakdown

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Worked example

Borrow $20,000 over 5 years at an unsecured personal loan rate of 12.95 percent. Spreading the loan across 60 monthly payments using the standard amortising formula gives a repayment of about $455 a month, which is roughly $105 a week. Each payment is part interest and part principal, with interest heaviest at the start while the balance is largest.

Over the full 60 months you repay about $27,273 in total. Of that, $20,000 is the money you borrowed and $7,273 is interest. In other words the interest adds more than a third on top of the amount borrowed at this rate. A shorter term raises the monthly payment but cuts the total interest sharply, and a secured car loan would usually carry a lower rate than this unsecured example. Lender establishment and ongoing fees are not included and would push the true cost higher.

How it is calculated

The repayment uses the standard amortising-loan formula. The annual interest rate is divided by 12 to get a monthly rate, and the term in years is multiplied by 12 to get the number of payments. The formula sets a fixed monthly amount that, after interest is charged each month and the rest reduces the balance, pays the loan to zero on the final payment. Total repaid is simply the monthly payment times the number of payments, and total interest is that figure minus the original amount borrowed. The model assumes a fixed rate and no extra repayments. Personal loan advertised rates in New Zealand vary widely with your credit and the lender, so compare the total repaid rather than the headline rate, and add any establishment or monthly account fees the lender charges.

Frequently asked questions

What rate do NZ personal loans charge?
Unsecured personal loan rates in New Zealand commonly run from around 7% to over 20% depending on the lender and your credit. Establishment and ongoing fees add to the cost, so compare the total repaid, not just the rate. Secured car loans are usually cheaper than unsecured personal loans.
Is personal loan interest tax-deductible in New Zealand?
No. Interest on a personal loan used for private purposes is not deductible under IRD rules. Deductibility only applies when borrowed money is used to earn assessable income, such as a loan to purchase a rental property or fund a business. If you use part of a personal loan for income-earning purposes you may be able to apportion the interest, but you would need to keep clear records and discuss the arrangement with a tax adviser.
Does taking out a personal loan affect KiwiSaver?
Taking out a personal loan does not directly affect your KiwiSaver account. Your KiwiSaver contributions continue at whatever rate you have set (3%, 4%, 6%, 8%, or 10% of gross pay) regardless of personal debt. However, carrying high-interest debt alongside KiwiSaver contributions is worth weighing up: loan interest of 15% or more typically costs more than the investment returns you might earn inside KiwiSaver, so some borrowers choose to reduce contributions temporarily while repaying expensive debt. The decision depends on whether you receive employer contributions and your personal tax rate.
What happens if I repay a NZ personal loan early?
Most New Zealand lenders allow early repayment of personal loans, but some charge a prepayment fee, sometimes called a break fee or early repayment fee, particularly on fixed-rate products. The Credit Contracts and Consumer Finance Act 2003 (CCCFA) requires lenders to disclose all fees in the loan contract before you sign. Check your contract for the early repayment clause before making a lump-sum payment. If there is no prepayment fee, paying extra reduces the principal faster, cuts total interest, and shortens the loan term.

Related calculators

Sources

  1. Inland Revenue — Individual Income Tax Rates, Inland Revenue Department (Te Tari Taake), New Zealand
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