Comparison Interest Rates - Explainer

If you’re a personal borrower, you will see 2 interest rates advertised in relation to finance and loan offers for consumer goods such as cars, boats and caravans:-

  • Consumer Interest Rate
  • Comparison Interest Rate

Much of the finance advertising will urge you to ‘compare interest rates’. But what you should be comparing is the comparison interest rate because that is a true representation of the cost of your loan.

What is the Comparison Interest Rate?

  • Comparison Interest Rates are completely different from ‘comparing interest rates’.
  • Comparing interest rates involves simply looking at the different rates offered by different lenders.
  • A Comparison Interest Rate is calculated by taking the amount you are borrowing, adding the fees and charges that your lender is charging to your loan, applying the current consumer interest rate to arrive at a total loan cost and then accounting for the number of years you are paying the loan off to arrive at the Comparison Interest Rate.
  • This rate is always advertised in relation to a specific example with the details of that example shown in conjunction with the rate.


  • Today’s Consumer Rate is 4.49%
  • Comparison Interest Rate is 5.72%: this is calculated on a secured personal loan for a new car, with a total loan of $40,000, for a loan term of 5 years.

Finance and loan providers, like Jade Finance are required under consumer law regulations to display all these details on all consumer finance advertisements and where advertising their interest rates.

Comparing Comparisons

If you’re shopping around for a consumer loan, you should be comparing both the comparison interest rate on the quotes you are offered AND considering all the terms and conditions included in your loan.

Your Jade Finance consultant is a trained, licensed finance professional and will explain all the details and fine print included in the loan offer quote we extend to you. As independent brokers, we are working for you and in your best interests. That’s your assurance that we will deliver you the cheapest loan offer on your boat, car, caravan, motorbike or jet ski.

For more information on comparison interest rates and for a better quote on your consumer loan, please speak with a Jade Finance Consultant. Call 1300 000 008

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