Personal Loan vs Credit Card Calculator NZ

This calculator compares borrowing the same amount on a personal loan against putting it on a credit card in New Zealand, showing the total interest and the time to clear each way so you can see which is genuinely cheaper. The two products work very differently. A personal loan gives you a fixed amount at a set rate over a fixed term, with level repayments that guarantee the debt is gone by the end. A credit card is open-ended: the rate is usually higher, and because the minimum payment is tiny, a balance can drift for years racking up interest unless you commit to paying a fixed amount. You enter the amount you need, the personal loan rate and term, and the credit card rate and the fixed monthly payment you would realistically make, and the calculator amortises the loan and simulates the card month by month. It then reports the total interest and payoff time for each, names the cheaper option, and shows the difference. For a planned purchase of a fixed size, the structure of a personal loan usually wins because the term forces the balance down, while a card only competes when you can clear it inside the interest-free window. Enter your figures to see which way costs you less.

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Personal loan is cheaper by $1,617
on total interest paid
Loan interest$1,566
Loan payment$266/mo
Card interest$3,182
Card payoff43 mo

Assumes no new card spending and a steady fixed card payment. Estimate only, not financial advice.

How it works

The personal loan is amortised at its rate over the term to find the level repayment and total interest. The credit card is simulated month by month at its rate, subtracting your fixed payment, until the balance clears, summing the interest. The calculator then compares the two interest totals.

Worked example

Borrowing 8,000 dollars at 12 percent over 3 years costs about 266 dollars a month and roughly 1,565 dollars in interest. Paying the same 266 dollars a month on a 19.95 percent card takes longer and costs more interest, so the loan wins.

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Frequently asked questions

Is a personal loan cheaper than a credit card?

Usually yes for a planned, fixed amount. Personal loans have lower rates than credit cards and a set term that forces the balance down, so the total interest is normally much less than carrying the same amount on a card.

When is a credit card better?

For small amounts you can clear within the interest-free period, a card is effectively free. The card only becomes expensive when a balance is carried month after month.

What rate do personal loans charge in New Zealand?

Unsecured personal loan rates vary widely by lender and your credit history, often from around 7 to 20 percent. Credit card purchase rates are typically in the high teens to low twenties.