A $20,000 personal loan is a flexible way to access funds for a wide range of purposes, with repayments spread over time to suit your budget. Whether you’re covering an unexpected expense, funding a project or planning a special event, it will provide you with a cash lump sum to help you manage the cost without disrupting your finances.
How much will my $20,000 personal loan cost?
The total cost of your $20,000 personal loan will depend on several factors, namely the interest rate you get, fees and the length of your repayment term.
Interest rate
The interest rate you receive has a major impact on the total cost of your loan, and even a small difference can significantly affect how much you pay overall. The table below shows how different interest rates can affect the cost of a four-year, $20,000 loan:
| Interest rate | Monthly repayment | Total interest | Total cost of loan |
|---|---|---|---|
| 6.00% p.a. | $470 | $2,546 | $22,546 |
| 6.25% p.a. | $472 | $2,656 | $22,656 |
| 6.75% p.a. | $477 | $2,877 | $22,877 |
| 7.50% p.a. | $484 | $3,212 | $23,212 |
| 8.00% p.a. | $488 | $3,436 | $23,436 |
| Calculations are for illustrative purposes only. Interest rates may not be reflective of the rate you’re offered on your personal loan. | |||
While the monthly repayment difference is small (only $18 more per month for an 8% p.a. loan compared with a 6% p.a. loan), the total cost difference is significant, adding $890 over the four-year term.
The rate you’re offered will depend on a variety of factors in your personal financial profile, including your credit score and income, as well as whether the loan is secured or unsecured (secured loans usually have lower rates) and the lender you choose.
Fees and charges
When applying for a loan, it’s important to look beyond the interest rate and consider any fees or charges that come with it, as these can significantly increase the overall cost. The loan with the lowest rate isn’t always the cheapest once fees are factored in.
To get a clearer idea of what you’ll actually pay, you should check the comparison rate, which includes both interest and standard fees, giving a more realistic picture of your loan’s true cost.
Common fees may include establishment and monthly service fees, and some lenders may also charge for making extra repayments or paying off your loan early.
Let’s look at an example of a $20,000 loan repaid over five years:
| Interest rate | Comparison rate | Total cost of loan | |
|---|---|---|---|
| Loan A | 6.00% p.a. | 7.7% p.a. | $24,111 |
| Loan B | 6.50% p.a. | 7.4% p.a. | $23,942 |
| Calculations are for illustrative purposes only. Interest and comparison rates may not be reflective of the rate you’re offered on your personal loan. | |||
While Loan A has a lower interest rate, its higher fees make it more expensive overall, showing why it’s essential to look beyond the rate when comparing personal loans.
Repayment period
The longer you take to repay your $20,000 loan, the more interest you’ll pay, increasing the total cost of your loan. Here’s how this could vary for a loan with a 5.85% p.a. interest rate over different loan terms:
| Loan term | Monthly repayment | Total interest | Total cost of loan |
|---|---|---|---|
| 1 year | $1,720 | $639 | $20,639 |
| 3 years | $607 | $1,855 | $21,855 |
| 5 years | $385 | $3,116 | $23,116 |
| 7 years | $291 | $4,422 | $24,422 |
| Calculations are for illustrative purposes only. Interest rate may not be reflective of the rate you’re offered on your personal loan. | |||
Shorter loan terms may mean higher monthly repayments, but you can save thousands in interest if you’re able to cover the cost.
Personal Loan Repayment Calculator
It’s important to have an idea of what your loan might cost you overall before you apply. Fortunately, Savvy’s personal loan calculator is simple to use and lets you know how much your repayments could be.
Your estimated repayments
$98.62
| Total interest paid: | Total amount to pay: |
| $1233.43 | $5,143.99 |
What can I use my $20,000 personal loan for?
A personal loan is a flexible product, meaning you can use your $20,000 for a variety of purposes. This can include:
- Debt consolidation: combine multiple high-interest debts into a single loan, potentially lowering your repayments and simplifying your finances.
- Home renovations: fund renovations or improvements around your home, from updating a kitchen to refreshing your bathroom.
- Legal fees: use a loan to cover unexpected legal costs such as family law matters, conveyancing or other legal services.
- Medical purposes: pay for elective procedures, dental work or other medical expenses not covered by insurance.
- Wedding: fund your wedding celebrations including the venue, catering and other costs for a memorable day.
- Travel: finance a holiday, honeymoon or gap year adventure without exhausting your savings.
If you’re looking to borrow $20,000 solely for an asset like a vehicle, a secured car loan, caravan loan or other relevant dedicated finance may be a more convenient option, depending on your situation.
Why apply for a personal loan with Savvy?
How to apply for a $20,000 personal loan with Savvy
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Apply online
Fill out our quick online form to request your $20,000 loan.
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Provide your documents
Upload the required documents securely through our online portal.
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Speak to a Savvy broker
One of our team members will call to discuss your personal loan options.
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Submit your application
Your broker will prepare and submit your application to your chosen lender.
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Receive your funds
Once approved, we’ll handle settlement and your $20,000 loan will be transferred to you.
Personal loan eligibility and documentation
Eligibility
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Age
You must be at least 18 years of age
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Residency
You must be an Australian citizen or permanent resident (or, in some cases, an eligible visa holder)
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Income
You must be earning a stable income that meets your lender’s minimum threshold (this can start from as little as $20,000 per year)
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Employment
You must be employed on a permanent, casual or self-employed basis
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Credit score
You must meet your lender’s minimum requirements related to your credit score and not be bankrupt or under a Part IX debt agreement
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Contact
You must have an active phone number, email address and online bank account in your name
Documents
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Personal information
Your full name, date of birth, address and contact details
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Photo ID
Such as a driver's licence or passport
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Payslips
Your last two consecutive payslips (or your last tax return if you're self-employed)
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Assets and liabilities
Information about any assets you own (such as a car or house) and liabilities in your name (such as other loans)
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Bank statements
90 days of bank statements may be requested, but not always
