Effective Interest Rate on Debt % is the usage rate that a borrower actually pays on a debt. It is calculated as the positive value of Interest Expense divided by its average total debt. Total debt equals to Long-Term Debt & Capital Lease Obligation plus Short-Term Debt & Capital Lease Obligation. Zip Co's annualized positive value of Interest Expense for the quarter that ended in Dec. 2025 was A$227 Mil. Zip Co's average total debt for the quarter that ended in Dec. 2025 was A$2,482 Mil. Therefore, Zip Co's annualized Effective Interest Rate on Debt % for the quarter that ended in Dec. 2025 was 9.13%.
Zip Co (ASX:ZIP) Effective Interest Rate on Debt % Explanation
Effective Interest Rate on Debt % measures the usage rate that a borrower actually pays on a debt.
Zip Co Effective Interest Rate on Debt % Related Terms
Zip Co Effective Interest Rate on Debt % Historical Data
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The historical data trend for Zip Co's Effective Interest Rate on Debt % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
ASX:ZIP vs V, MA, AXP: Effective Interest Rate on Debt % Comparison
For the Credit Services subindustry, Zip Co's Effective Interest Rate on Debt %, along with its competitors' market caps and Effective Interest Rate on Debt % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Zip Co Effective Interest Rate on Debt % vs Credit Services Industry
For the Credit Services industry and Financial Services sector, Zip Co's Effective Interest Rate on Debt % distribution charts can be found below:
* The bar in red indicates where Zip Co's Effective Interest Rate on Debt % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual Effective Interest Rate on Debt %, the Interest Expense of the last fiscal year and the average total debt over the fiscal year are used. In calculating the quarterly data,
the Interest Expense data used here is two times the semi-annual (Dec. 2025) interest expense data.
Effective Interest Rate on Debt % is displayed in the 30-year financial page.
What does a Effective Interest Rate on Debt % of 9.13% mean?
Zip Co (ASX:ZIP) has a Effective Interest Rate on Debt % of 9.13% as of Dec. 2025. Effective interest rate on debt is the rate a company actually pays on its debt. View historical data on Zip Co and its competitors.
Is Zip Co's Effective Interest Rate on Debt % too high?
Zip Co's current Effective Interest Rate on Debt % is 9.13%. Overall, Zip Co has a GF Score™ of 63/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Zip Co's Effective Interest Rate on Debt % compare to V and MA?
Zip Co's Effective Interest Rate on Debt % of 9.13% can be compared against companies in the Credit Services industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Effective Interest Rate on Debt % for a Credit Services company?
A good Effective Interest Rate on Debt % depends on the Credit Services industry context. However, Effective Interest Rate on Debt % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Effective Interest Rate on Debt % mean?
A high Effective Interest Rate on Debt % can signal that a stock is expensive relative to its fundamentals. Effective interest rate on debt is the rate a company actually pays on its debt. View historical data on Zip Co and its competitors. Zip Co's current Effective Interest Rate on Debt % is 9.13%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Zip Co stock overvalued right now?
Based on GuruFocus' analysis, Zip Co (ASX:ZIP) is currently considered Significantly Overvalued. The stock's GF Value™ is A$2.08, compared to a current price of A$3.23 — trading 55.3% above its estimated fair value. The current Effective Interest Rate on Debt % is 9.13%. Zip Co's overall GF Score™ is 63/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Effective Interest Rate on Debt % calculated?
Effective Interest Rate on Debt % is calculated from a company's financial statements. For Zip Co (ASX:ZIP), the current Effective Interest Rate on Debt % is 9.13% as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Zip Co (ASX:ZIP) Overvalued in 2026?
Based on GuruFocus' analysis, Zip Co stock appears to be overvalued.
The current stock price of A$3.23 is trading 55.3% above its estimated GF Value™ of A$2.08.
GuruFocus considers Zip Co to be Significantly Overvalued.
Key valuation signals for ASX:ZIP:
Effective Interest Rate on Debt %: 9.13%
GF Value™: A$2.08 vs. price of A$3.23 (55.3% above fair value)
No single metric tells the full story. See the ASX:ZIP stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Zip is a credit provider operating two segments: Australia and New Zealand, and the US. Founded in Australia in 2013, it has over 6 million active customers and partners with over 85,000 merchants. In Australia, Zip positions itself as a credit card alternative, with several revolving credit products. Customers can carry the balance over time with a monthly fee and set their own repayment schedule. The US and New Zealand offering is a far more vanilla BNPL offering: Pay-in-4 in New Zealand and Pay-in-Z in the US, where customers pay back in fixed instalments. The US segment is built on the 2020 acquisition of QuadPay and has recently become Zip's largest and fastest-growing segment.
63GF Score
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Effective Interest Rate on Debt % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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