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General information only: This guide does not consider your objectives, financial situation or needs and is not financial advice. Credit eligibility, rates and terms depend on the lender's assessment.
The two rates answer different questions
The interest rate is the percentage used to calculate interest on the outstanding loan balance. It does not, by itself, show every cost connected with the loan.
A comparison rate combines the interest rate with certain ascertainable fees and charges for a specified loan amount and term. It is designed to make advertised consumer-credit costs easier to compare, but it is not a personalised quote.
Compare the same amount and term
A comparison rate is only meaningful for the example on which it is based. Different loan amounts, terms, repayment frequencies and fee structures can produce a different result.
The National Credit Regulations also recognise that some contingent costs, including certain early repayment or redraw fees, may not be included. Review the credit contract and fee schedule as well as the headline percentage.
- Check the amount and term used
- Review establishment and ongoing fees
- Compare total repayments
- Check whether a balloon payment is included
How BaseRate presents examples
Generic BaseRate repayment examples use a clearly labelled illustrative interest rate and exclude lender-specific fees. They are estimates, not finance offers. When a specific option is presented, review its applicable interest rate, comparison rate, fees, term and total repayment amount before deciding whether to proceed.
Sources and further reading
Primary sources checked when this guide was reviewed:
Read BaseRate's editorial policy and calculator methodology.