What a small loan costs: worked Australian examples

Skypay Connect · Published 24 September 2026 · Updated 29 September 2026

A loan's cost is easier to understand when you separate the amount borrowed, the scheduled charges and the total repayments. The examples below illustrate fee calculations. They are not lender offers, approval estimates or a recommendation to borrow.

Small-amount loan fee examples

For the payday loans covered by Moneysmart's guidance, the maximum establishment fee is 20% of the amount borrowed and the maximum monthly fee is 4%. These examples assume those maximum fees, the stated number of monthly charges and every repayment made on time.

Illustrative scheduled costs, excluding default and other contingent charges
Calculation	$500, 3 monthly fees	$2,000, 6 monthly fees
Amount borrowed	$500	$2,000
Establishment fee: amount × 20%	$100	$400
Monthly fees: amount × 4% × months	$60	$480
Scheduled charges	$160	$880
Total scheduled repayments	$660	$2,880

The monthly fee in these examples is calculated on the original amount, not on the reducing balance. A 4% monthly fee is not a 4% annual interest rate. Moneysmart's calculator assumes a monthly fee for each commenced month. Ask the lender how the exact dates affect your contract.

Compare offers on the same basis

Write down the amount you would actually receive, the total you would repay and the last repayment date. For example, a quote that requires 20 payments of $45 totals $900. A second quote requiring 30 payments of $34 totals $1,020. The second weekly payment is smaller, but its scheduled total is $120 higher. This is an arithmetic illustration; it does not establish which product is suitable.

Ask about costs outside the schedule

What happens if a direct debit fails or a payment is late?
What would it cost to repay early on a specified date?
Are there separate charges or optional products?
Does the first repayment fall before your next income payment?

Do not apply the small-amount fee example to every personal loan. Other products have different pricing structures. Use the actual contract and the lender's written payout figures. Moneysmart's personal-loan guide explains other comparison points.

If the repayment would leave essentials unpaid, pause before accepting. A referral or approval does not remove the need to understand the cost.

WARNING - Do you really need a loan today?It can be expensive to borrow small amounts of money and borrowing may not solve your money problems. Check your options before you borrow: for information about other options for managing bills and debts, ring 1800 007 007 from anywhere in Australia to talk to a free and independent financial counsellor; talk to your electricity, gas, phone or water provider to see if you can work out a payment plan; if you are on government benefits, ask if you can receive an advance from Centrelink. The Government's MoneySmart website shows how small amount loans work and suggests other options that may help you.

Sources and editorial information

Published by Skypay Connect, a brand of Skypay Pty Ltd. Prepared with AI assistance; linked sources checked on 29 September 2026. Examples are illustrative. This guide provides general information and does not assess whether a loan is suitable for you. Contact us about a correction.

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