How loan repayments are worked out
Repayment = (amount − balloon ÷ (1 + r)^n) × r ÷ (1 − (1 + r)^−n)
A balloon (or residual) lowers each repayment, but you still owe it as one lump sum at the end, and you pay interest on it for the whole term.
Worked example
A $30,000 car loan at 7.5% over 5 years costs $601.14 a month. Over 60 repayments you pay $36,068.31, so the loan costs $6,068.31 in interest.
Tips
- Compare the comparison rate, not just the advertised rate: it includes most fees.
- Secured car loans (the car is the security) usually have lower rates than unsecured personal loans.
- A shorter term means higher repayments but much less interest overall.
Borrowing for a home? Use the mortgage repayment calculator.
Frequently asked questions
What are the repayments on a $30,000 car loan?
At 7.5% over 5 years, about $601 a month, with about $6,068 of interest in total.
What is a balloon payment?
A lump sum due at the end of a car loan. It cuts the regular repayments but increases the total interest.
What is a comparison rate?
A rate that combines the interest rate with most upfront and ongoing fees, so you can compare loans fairly. Lenders in Australia must show it in ads.
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Last updated October 2026.