Clear definitions of key Australian Australian personal loans, debt consolidation and borrowing terms. Use this glossary alongside our calculator to understand your results.
The process of gradually paying off a loan through regular scheduled repayments covering both interest and principal.
A larger lump-sum payment due at the end of a loan term, reducing regular repayment amounts during the loan.
The true annual cost of a loan including most fees and charges. Required by Australian law to be displayed.
A numerical rating (0-1200 in Australia) representing your creditworthiness based on your borrowing and repayment history.
Combining multiple debts into a single loan, ideally at a lower interest rate to reduce total interest and simplify repayments.
Failure to make required loan repayments, which damages your credit rating and may lead to legal action by the lender.
A charge imposed by some lenders when a fixed-rate loan is paid off before the agreed term ends.
A person who agrees to repay the loan if the primary borrower defaults. Guarantors take on significant financial risk.
A temporary change to loan terms negotiated with a lender when a borrower is experiencing financial difficulty.
The percentage of the loan amount charged by the lender for borrowing, expressed as an annual rate.
A loan backed by collateral (an asset) which the lender can repossess if you default. Typically attracts lower interest rates.
A loan not backed by collateral. Higher risk for the lender, resulting in higher interest rates than secured loans.
Now that you understand the terminology, use our free Personal Loan Calculator to calculate your results. All terms above appear throughout the calculator and our guides.
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