Continue your simulation with the NOW Finance comparison rate and learn why a no-fee loan shows identical comparison and interest rates.
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Choose another amountAustralian lenders must publish a comparison rate alongside the interest rate so borrowers can see the effect of standard fees. In this guide you will learn how comparison rates are calculated, why NOW Finance’s personal loans show matching figures, why benchmark comparisons can mislead for small loans and how to compare offers using total repayments.
Direct answer: a comparison rate combines the interest rate with standard fees for a benchmark loan, which NOW Finance states is A$30,000 over five years. Because the lender says its personal loans have no establishment, monthly or early repayment fees, the comparison rate equals the interest rate. A 10% loan therefore shows a 10% comparison rate.
Listings in 2026 showed NOW Finance personal loan rates starting in the mid single digits and reaching the high twenties, depending on the borrower and on whether the loan was secured. For lenders that do charge fees, the comparison rate rises above the interest rate, and the gap grows larger as the loan amount falls or the term shortens.
Many borrowers treat the comparison rate as the exact cost of their own loan. It is accurate only for the benchmark amount and term. For a A$10,000 loan over three years, a lender with fees can be considerably more expensive than its published comparison rate suggests. Calculating total repayments for your own loan avoids that misunderstanding.
Next, you will see how the comparison rate is calculated, a worked comparison with a fee-charging lender, why small loans behave differently, the cost of different personalised rates, secured versus unsecured pricing, mistakes to avoid and a checklist. Keep your personalised quote handy so you can apply the method to the exact amount and term you are considering.
How the comparison rate is calculated
The lender takes a benchmark amount and term, adds standard upfront and ongoing fees to the repayments and finds the single annual rate that equates the cash received with the repayments. Fees that depend on behaviour, such as late fees, are excluded, as are optional products.
A worked comparison with a fee-charging lender
On the A$30,000, five-year benchmark, a no-fee loan at 10% has a comparison rate of 10%. A competitor at 10% that adds a A$500 establishment fee to the loan and charges A$10 a month would have a comparison rate of roughly 11.4%. Both share the same interest rate, but the competitor costs more.
| Loan (A$30,000, 5 years) | Interest rate | Fees | Comparison rate |
|---|---|---|---|
| No-fee loan | 10% | None | 10.0% |
| Fee-charging loan | 10% | A$500 plus A$10 per month | about 11.4% |
Why small loans behave differently
Fixed fees weigh more on smaller loans. For A$10,000 over three years, the same A$500 fee and A$10 monthly fee would lift the effective cost of a 10% loan to roughly 15.4%, far above its benchmark comparison rate. A no-fee loan at 10% remains 10% whatever the amount.
| Loan at 10% | Fee-charging lender effective rate | No-fee lender |
|---|---|---|
| A$30,000 over 5 years | about 11.4% | 10% |
| A$10,000 over 3 years | about 15.4% | 10% |
The cost of different personalised rates
With no fees, the interest rate drives the entire cost. For A$30,000 over five years, the table shows how much the personalised rate matters.
| Rate | Monthly repayment | Total interest |
|---|---|---|
| 6.45% | about A$586 | about A$5,180 |
| 10% | about A$637 | about A$8,240 |
| 15% | about A$714 | about A$12,820 |
| 22% | about A$829 | about A$19,720 |
Your credit file decides which row applies, which is why improving it before applying can save more than any fee difference between lenders.
Secured versus unsecured pricing
Secured loans backed by a vehicle may carry lower rates because the lender can recover the car if repayments stop. Comparison rates for secured loans are lower accordingly. Weigh the saving against the risk of losing a vehicle you need for work or family life.
Comparing using total repayments
- Use the same amount and term for every offer.
- Add all upfront and monthly fees to the repayments.
- Multiply the monthly outlay by the number of months.
- Add any fees paid separately.
- Choose the lowest total that fits your budget.
A worked comparison for a A$12,000 loan
Ava needs A$12,000 over four years. NOW Finance quotes 11.5% with no fees, about A$313 a month and A$3,030 in interest. A bank offers 10.5% with a A$250 establishment fee added to the loan and A$12 a month, about A$314 plus A$12, or A$326 a month, with total extra costs of about A$3,630. The no-fee offer is cheaper by roughly A$600.
| Offer | Rate | Fees | Monthly outlay | Interest and fees |
|---|---|---|---|---|
| NOW Finance example | 11.5% | None | about A$313 | about A$3,030 |
| Bank offer | 10.5% | A$250 plus A$12 per month | about A$326 | about A$3,630 |
On a A$40,000 loan, the result might reverse because fixed fees weigh less. Ava’s comparison shows why each borrower should calculate totals at their own amount rather than rely on the benchmark comparison rate alone.
How rate changes affect a no-fee loan
Because NOW Finance rates are fixed, your comparison rate and repayment stay the same for the term. Market rate changes after settlement do not affect you. If rates fall sharply and your credit improves, refinancing with another lender could be considered, and the absence of early repayment fees makes that switch cheaper.
Using extra repayments to beat the comparison rate
The comparison rate assumes you repay on schedule. With free extra repayments, you can reduce the total interest below what the schedule implies. Adding A$100 a month to the A$30,000 loan at 10% over five years shortens it by about ten months and saves roughly A$1,450.
Mistakes to avoid
- Assuming the comparison rate matches your loan exactly.
- Comparing one lender’s interest rate with another’s comparison rate.
- Ignoring fixed fees on small loans.
- Choosing a lender only because it has no fees.
- Overlooking optional insurance added to repayments.
Questions to ask any lender about comparison rates
- What amount and term is the comparison rate based on?
- Which fees are included and which are excluded?
- What would the effective rate be for my exact loan?
- Are there optional products that would add to the cost?
Asking these questions turns a single advertised number into useful information and helps you spot loans whose real cost is higher than the comparison rate suggests.
Summary: the NOW Finance comparison rate
Without fees, NOW Finance’s comparison rate equals its interest rate. Compare it with fee-charging lenders using total repayments for your exact loan.
- Comparison rates use a benchmark loan.
- No fees means matching rates.
- Fees matter more on small loans.
- Your personalised rate drives the cost.
- Compare totals, not just rates.
Frequently asked questions
What benchmark does NOW Finance use?
It states that comparison rates are based on A$30,000 over five years.
Why is the comparison rate the same as the interest rate?
Because the lender says its personal loans have no fees to include.
Does the comparison rate include late fees?
No, behaviour-based fees are excluded from comparison rates.
Are secured loans included in the same comparison rate?
Secured loans have their own rates and comparison rates.
Can I trust a comparison rate for a small loan?
Use it as a guide, then calculate total repayments for your exact amount.
Do all Australian lenders use the same benchmark?
Many use A$30,000 over five years, but always check the stated basis.
Conclusion
The NOW Finance comparison rate is simple because there are no fees, but it still needs context. Compare offers using total repayments for your own amount and term, remember that fees weigh more on small loans and focus on securing the lowest personalised rate.