Loan Repayment Calculator

Use the loan repayment calculator

Enter your loan amount, the annual interest rate (the representative APR the lender quoted you) and the term in months or years. The tool above does the rest - your monthly repayment, the total interest you'll pay and the overall amount repaid all update instantly as you change the figures.

What a loan repayment actually includes

Every monthly repayment on a standard personal loan is made up of two parts: a slice of the original amount you borrowed (the capital, sometimes called the principal) and the interest the lender charges for that month. On a fixed-rate loan the monthly payment stays the same throughout, but the split between capital and interest shifts. Early on, most of your payment is interest because the outstanding balance is large. As the balance shrinks, more of each payment chips away at the capital.

That is the single most useful thing to understand about borrowing, and it's why two loans with the same monthly payment can cost wildly different amounts overall. A longer term lowers the monthly figure but means you pay interest for more months, so the total cost climbs. A loan repayment calculator lets you see that trade-off in pounds rather than guessing.

One thing to check: most reputable UK personal loans use a fixed, reducing-balance interest method, which is what this calculator assumes. Some borrowing - overdrafts, credit cards, certain catalogue or store finance - works differently and can charge interest on the full balance or compound it daily, so the same headline rate costs more. If you're comparing those, treat the result here as a clean baseline rather than an exact match.

How the loan repayment calculator works

The calculator uses the standard amortisation formula that UK lenders use to set a level monthly repayment. In plain words:

Monthly repayment = (Loan amount × monthly rate) ÷ (1 − (1 + monthly rate) raised to the power of minus the number of payments)

There are only three inputs feeding it:

• Loan amount - the sum you borrow (the principal).
• Monthly interest rate - the annual rate divided by 12. A 9.9% APR becomes 0.099 ÷ 12 = 0.00825 per month.
• Number of payments - the term in months. A five-year loan is 60 payments.

Once the monthly repayment is fixed, the rest follows. Multiply the monthly repayment by the number of payments to get the total amount repaid. Subtract the original loan amount from that, and what's left is the total interest. So:

• Total repaid = monthly repayment × number of payments
• Total interest = total repaid − loan amount

APR matters here. The Annual Percentage Rate is a standardised figure that, by FCA rules, rolls the interest and most compulsory fees into one number so you can compare lenders fairly. The rate you're advertised is usually the "representative APR", which at least 51% of accepted applicants must get - your personal rate after a credit check can be higher. Plug in the rate you're actually offered, not the headline one, for a realistic result.

Worked example: Priya's £10,000 car loan

Priya, a nurse in Leeds, wants to borrow £10,000 to buy a used car. Her bank offers a personal loan at 8.9% APR over 4 years (48 months). Here's how the loan repayment calculator gets to her monthly cost.

• Monthly rate = 8.9% ÷ 12 = 0.7417% (0.0074167)
• Number of payments = 48
• Monthly repayment = (10,000 × 0.0074167) ÷ (1 − 1.0074167 to the power of −48) = £248.18

So Priya pays roughly £248 a month. Over the full term:

• Total repaid = £248.18 × 48 = £11,912.64
• Total interest = £11,912.64 − £10,000 = £1,912.64

Now watch what stretching the term does. If Priya took the same £10,000 at 8.9% over 6 years (72 months) instead, the monthly repayment drops to about £180 - easier on the budget - but the total interest climbs to roughly £2,940. The longer loan is around £1,000 more expensive overall, purely because she's paying interest for two extra years. The monthly figure looks friendlier; the total cost doesn't.

That gap is the whole reason to run the numbers before you commit. A repayment you can afford comfortably is good. A repayment you can afford comfortably and the shortest term that fits your budget is usually cheaper.

Capital versus interest: where your money goes each month

Using Priya's first loan, the first monthly payment of £248.18 breaks down as roughly £74 interest (£10,000 × 0.0074167) and £174 capital. By the final payments, almost the entire £248 is capital because the balance is nearly cleared. This is why overpaying early in a loan saves more interest than overpaying near the end - you're knocking out months when the interest charge is at its highest. If you think you might pay extra, our early repayment calculator shows the interest you'd save and whether an early settlement charge would eat into it.

How to bring your monthly repayment down

If the figure the calculator gives you is more than you're comfortable with, you have a few honest levers rather than wishful thinking:

• Borrow less. The most direct fix. A bigger deposit on a car, or trimming the amount to what you truly need, cuts both the monthly payment and the total interest.
• Get a better rate. A few percentage points of APR makes a real difference over the term. Tidy up your credit file, clear small debts, and check whether you qualify for a lower-rate loan before applying widely.
• Choose the term carefully. A longer term lowers the monthly cost but raises the total. Pick the shortest term whose monthly repayment you can comfortably meet, not the longest one a lender will allow.
• Consolidate sensibly. If you're juggling several expensive debts, a single lower-rate loan can cut the monthly outgoing - but only if you don't run the old balances back up. Our debt consolidation calculator compares your current repayments with one combined loan.

For a broader view of any fixed loan, or to model a personal loan specifically, try the loan calculator hub or the personal loan calculator, which use the same amortisation maths with inputs tuned to each type of borrowing.

What happens if you miss a repayment

Missing a payment isn't just a late fee. Lenders report your payment history to the credit reference agencies, and a missed loan repayment can sit on your file for six years, making future borrowing harder and more expensive. You may also be charged a default fee and additional interest. If money is tight, the worst move is to go quiet - UK lenders are required by FCA rules to treat customers in financial difficulty fairly, and many will agree a reduced or paused arrangement if you contact them early. Free, impartial help is available from MoneyHelper and debt charities; speaking to them costs nothing and protects your credit standing far better than a default does.

Common mistakes people make

• Confusing the monthly rate with the annual rate. The formula needs the annual APR divided by 12. Entering the full annual rate as a monthly figure overstates your repayment massively.
• Using the representative APR instead of your offered rate. The advertised rate only has to go to 51% of accepted applicants. After a credit check your personal rate may be higher, so re-run the calculator with the real number once you have a quote.
• Forgetting fees and add-ons. APR captures compulsory fees, but optional extras like payment protection, arrangement fees on some products, or car-finance balloon payments sit outside a basic repayment calculation. Read the agreement.
• Treating credit cards and overdrafts like loans. These often charge interest on the whole outstanding balance or compound it, so a flat amortisation result won't match. Use a credit card repayment calculator for revolving debt instead.
• Chasing the lowest monthly payment. Stretching the term is the easiest way to lower a monthly figure and the easiest way to overpay overall. Always check the total interest, not just the headline instalment.
• Assuming the rate is fixed when it isn't. Most personal loans are fixed, but some borrowing has a variable rate that can rise. A fixed-rate calculation only holds if your rate is actually fixed.

A note on rates and regions

Loan interest is set by the lender and the market, not by HMRC, so unlike income tax or stamp duty there's no official rate to quote - and the method is identical across England, Scotland, Wales and Northern Ireland. What varies is the deal you're offered, which depends on your credit profile, the amount, the term and the wider interest-rate environment. For impartial, official guidance on borrowing and your rights as a UK consumer, see MoneyHelper's borrowing guides, backed by the government's Money and Pensions Service.

This loan repayment calculator gives estimates for guidance only and is not personal financial advice. Always check the exact figures and terms in your credit agreement before signing.

Who should use this calculator

This is aimed at a loan you already hold and want to clear faster. The headline monthly payment matters less here than the two overpayment fields: a regular extra amount each month, or a lump sum in a chosen year, and what each removes from the interest and the time remaining.

Overpaying a personal loan behaves differently from overpaying a mortgage. Personal loans are usually shorter and at higher rates, so the interest saved per pound overpaid is often larger — but UK rules allow a lender to charge up to around two months’ interest to settle early, which can erode the benefit on a loan close to its end. If you are comparing new borrowing rather than clearing existing debt, the loan calculator is framed for that.

What this calculator assumes

• The balance you enter is the amount still outstanding, not the original advance.
• Repayment follows a standard amortising schedule at a fixed rate for the remaining term.
• Overpayments are applied to the capital, which is what shortens the term.
• Interest accrues on the reducing balance, so the earlier an overpayment lands the more it saves.

Limitations — what it does not cover

• Early settlement interest. Under the Consumer Credit Act a lender may add up to roughly 58 days’ interest when you settle a regulated loan early — always ask for a settlement figure rather than assuming the balance.
• Front-loaded interest on some agreements, where paying off half the term does not halve the interest.
• Priority between debts. If you hold several, clearing the highest-rate one first usually saves the most, and this looks at one loan in isolation.
• Credit-file effects of settling early, which are generally neutral to positive but not modelled here.
• Payment holidays and arrears, which add interest and change the schedule.

Related calculators

Once you know your monthly repayment, these tools help you go further: the loan calculator for any fixed loan, the early repayment calculator to see what overpaying saves, and the debt consolidation calculator if you're combining several debts into one.

The numbers: what a £10,000 loan really costs

Monthly repayments and the total cost of borrowing £10,000 at typical UK personal loan APRs. Scale to your amount.

Lenders must show the APR including fees. Free debt and borrowing guidance: MoneyHelper.