Interest on personal loans

Your loan term can be between six months and seven years. You’ll be charged interest on the loan amount and repay that amount, plus the interest, in fixed repayments over the loan’s term. Each repayment includes:

• principal (the amount you borrowed)
• interest (what the bank charges you when you borrow money).

Your loan term can be between six months and seven years. Your repayments depend on how you set up your loan, including how long you’re borrowing the money for and how frequently you’ll make repayments. 

Interest is what you pay to borrow money from a lender, such as a bank. The interest rate is set during the application process and is expressed as a percentage e.g. —% per annum (p.a.). 

When you take out an ANZ Personal Loan, you’ll have a structured repayment plan and a fixed interest rate. This means you’ll know how much interest you’ll pay and when you’ll be debt-free.

To calculate interest, we’ll multiply your interest rate, as a percentage, by the amount you owe on your loan at the end of each day. We then divide that amount by 365 to get the amount of interest you owe us for that day. We decide the end of day, and we assume the year will always have 365 days. 

We’ll charge you interest we’ve calculated every month, in arrears, on the first business day of the next month. Unless we’ve agreed otherwise, we’ll add this interest to the loan amount monthly, whether your scheduled loan repayments are monthly or not. When we add this interest, your loan amount will increase by that amount until you make your next scheduled loan repayment. 

‘In arrears’ means you owe an amount now, but we’ll charge it to you later. For example, when we charge you interest on 1 February it includes interest from 1 January to 31 January. 

While your repayments are fixed, the interest charged to your loan may be different each month. The exact amount depends on factors such as:

• Number of days in the month
• Interest rate
• How much you’ve paid off already.

Your loan summary letter outlines the new personal loan you’ve taken out with ANZ. It includes important information about the money you’re borrowing, such as the interest rate, your repayment plan, and more. 

Loan statements provide a summary of the payments you’ve made within the statement period – usually every six months – and the interest that has been charged.

You’ll also see your closing balance for the period. The closing balance is the remaining principal balance (loan amount) still to be paid off, excluding interest yet to be charged.

You’ll receive a loan statement every six months. You can view your online statements in ANZ Internet Banking or your ANZ goMoney app.