Loan Repayment Calculator
Work out your monthly payment on a personal loan, car finance, or debt consolidation — and see how paying a little extra each month gets you debt-free sooner.
Your scheduled monthly payment
£198.01
You'll pay £198.01 per month for 5 years. Over the life of the loan you'll pay £1,880.72 in interest on top of the £10,000.00 you borrowed.
Balance and interest over time
Year-by-year breakdown
| Year | Payments | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | £2,376.14 | £645.16 | £1,730.98 | £8,269.02 |
| 2 | £2,376.14 | £520.03 | £1,856.11 | £6,412.91 |
| 3 | £2,376.14 | £385.85 | £1,990.29 | £4,422.62 |
| 4 | £2,376.14 | £241.97 | £2,134.17 | £2,288.45 |
| 5 | £2,376.14 | £87.70 | £2,288.45 | £0.00 |
Formula
A standard amortising loan is calculated as
M = P × r(1+r)n / ((1+r)n − 1),
where P is the loan amount, r is the monthly rate
(annual rate divided by 12), and n is the term in months. When the rate
is zero, monthly payment is simply M = P / n.
Each month, interest is charged on the remaining balance and the rest of the payment
reduces the principal — so early payments are mostly interest, and later payments are
mostly principal.
When this calculator helps
Use this calculator whenever you are about to take out a personal loan, finance a car, or consolidate a few debts into one, and you want to know what the monthly repayment will really be before you commit. It turns the amount you borrow, the interest rate, and the term into a single monthly figure — and, just as importantly, into the total amount you will have paid back by the end.
It is built for the comparison stage. When two lenders quote different rates or terms, plugging both into the calculator shows which one actually costs less overall, not just which has the smaller-looking monthly payment. That distinction matters in the UK, where loans are advertised as a representative APR and the headline number can hide a meaningfully different total cost of credit.
How to read your result
Three numbers come back: the monthly payment, the total repaid, and the total interest. The monthly payment is what leaves your account each month; the total repaid is every payment added together; the total interest is that total minus the amount you borrowed — the genuine price of the loan.
Rate and term trade off against each other. A longer term lowers the monthly payment, which can look attractive, but you make more payments and the interest piles up — so the total cost rises even though each month feels easier. A shorter term costs more per month but far less overall. The total interest figure is where that trade-off shows up plainly, so weigh it against the monthly figure rather than chasing the lowest monthly payment.
A worked example
Suppose you borrow £10,000 over 5 years at a representative APR of 7%. The monthly repayment works out to roughly £198, you would repay around £11,880 in total, and the interest comes to about £1,880. Stretch the same loan to 7 years and the monthly payment drops to around £151 — easier each month, but you would pay back closer to £12,700, so the longer term costs you several hundred pounds more in interest for the convenience.
Common mistakes to avoid
Most costly loan decisions come from looking at the wrong number or forgetting what is not included in the rate.
- Comparing monthly payments instead of total cost — a lower monthly figure often just means a longer term and more interest paid overall.
- Comparing a bare interest rate against an APR — the representative APR includes fees, so always compare like with like.
- Ignoring arrangement fees, payment protection, or add-on insurance, none of which this calculator includes in the principal.
- Extending the term purely to shrink the monthly payment, without noticing how much extra interest that adds across the life of the loan.
How UK loan rates and APR work
UK lenders advertise a representative APR, which by law only has to be offered to 51% of accepted applicants. That means the rate you are actually offered after a credit check can be higher than the headline figure — the advertised rate is a marketing minimum, not a promise. Your credit file, income, and the loan amount all feed into the personalised quote you finally receive.
Because APR bundles in fees as well as interest, it is the fairest single number for comparing loans, and it is what you should enter here as a working rate. Just remember the calculator applies it as a flat periodic rate to the balance, so for loans with large upfront fees the true monthly cost can differ slightly from the figure shown. Always check the lender's own quote and the pre-contract credit information before signing.
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Frequently asked questions
What's the difference between APR and the interest rate I enter here?▾
APR (Annual Percentage Rate) is the rate lenders advertise — it includes fees and reflects the total cost of credit. The rate this calculator uses is a flat periodic interest rate applied to the balance each month. For a fee-free loan the two will match closely; for a loan with arrangement fees the advertised APR will be higher than the underlying interest rate. Use the lender's stated APR as a working figure unless you know the true periodic rate.
Can I make extra monthly payments to pay off the loan sooner?▾
Yes — that's exactly what the 'Extra monthly payment' field models. Most UK lenders allow overpayments, although some charge an early repayment fee under the Consumer Credit Act (typically up to 1% of the amount overpaid for loans over 12 months remaining, less for shorter terms). Check your loan agreement before committing.
Does this calculator account for arrangement fees or insurance?▾
No. Enter just the principal you're borrowing and the headline interest rate. Arrangement fees, payment protection insurance, and any other charges should be assessed separately when you compare offers.
What's the difference between a personal loan and a mortgage?▾
A mortgage is a secured loan against a property — interest rates are typically lower because the lender can repossess if you default. Personal loans are unsecured, with shorter terms (1–7 years is typical) and higher rates. Use our Mortgage Calculator (coming soon) for property finance.
What if I miss a payment?▾
Missed payments usually trigger a fee and damage your credit file. If you're worried about affording payments, contact the lender first, then a free debt-advice service like StepChange or Citizens Advice. This calculator does not model missed payments — it assumes the schedule runs to completion.