How to use this calculator
The calculator updates as you type, so you can try different numbers and compare the results straight away.
- Loan amount: how much you want to borrow. If an arrangement fee is added to the loan, include it here.
- Interest rate (APR): the annual percentage rate. Use the personalised APR from your loan offer, not the representative APR in an advert, as you may be offered a different rate.
- Loan term: how long you have to repay, in years or months. Unsecured personal loans in the UK usually run from 1 to 7 years.
- Extra monthly payment (optional): any amount you plan to overpay each month. The calculator takes it straight off the balance, so you can see how much sooner you’ll be debt-free.
The results show your monthly repayment, the total interest, the total amount repayable and your payoff date. Below them, the chart shows how much capital and interest you repay each year, and the schedule lists every repayment.
Example: a £10,000 loan at 6.9% APR
Say you borrow £10,000 at 6.9% APR over 5 years (60 months).
| Result | |
|---|---|
| Monthly repayment | £197.54 |
| Total interest | £1,852.43 |
| Total amount repayable | £11,852.43 |
In the first month, £57.50 of your repayment is interest and £140.04 reduces the balance. Interest takes a bigger share at the start because you owe the most then. In the first year alone you pay £635.82 in interest, about a third of the total.
Now overpay £50 a month. Your monthly payment becomes £247.54, the loan is cleared in 47 months instead of 60, and total interest falls to £1,412.60. That saves £439.83, before any early repayment fee your lender charges.
The rate matters as much as the term. If your credit history means you’re offered 12.9% instead of 6.9%, the same loan costs £227.02 a month and £3,621.15 in interest, nearly twice as much.
How it’s calculated
The calculator uses the standard amortisation formula that UK lenders use for fixed-rate personal loans:
Monthly repayment = P × r ÷ (1 − (1 + r)^−n)
- P is the amount borrowed.
- r is the monthly interest rate: the APR divided by 12, as a decimal. A 6.9% APR gives r = 0.069 ÷ 12 = 0.00575.
- n is the number of monthly repayments.
Each month, interest is the outstanding balance multiplied by r. The rest of the repayment reduces the balance. Any overpayment also comes straight off the balance, which lowers the next month’s interest. At 0% APR there is no interest, so the repayment is the amount borrowed divided by the number of months.
We calculate at full precision and round only for display. The final repayment is adjusted so the balance ends at exactly £0. Lenders round each repayment to the penny, so your credit agreement may differ from ours by a few pence in total.
Dividing the APR by 12 is the standard simplification for a monthly rate. Because APR is defined as an annual compound rate that also includes fees, a lender’s exact figures can differ slightly from this estimate. Your credit agreement shows the exact monthly repayment and total amount repayable.
Tips to pay less interest
- Compare the total amount repayable. A lower monthly repayment often just means a longer term. Enter each offer into the calculator and compare the totals.
- Choose the shortest term you can comfortably afford. The example shows a shorter term saves more than most rate differences.
- Check your eligibility before applying. Many lenders offer a soft-search eligibility check that shows your likely rate without affecting your credit file.
- Look for “sweet spot” amounts. Some lenders offer lower rates for certain loan sizes, so check whether borrowing a slightly different amount changes your APR.
- Overpay early if your agreement allows it. Overpayments save the most interest at the start of the loan, when the balance is highest. Ask your lender how they apply overpayments and whether a fee applies.
- Don’t borrow more than you need. Every extra pound borrowed adds interest for the whole term.
Frequently asked questions
How are monthly loan repayments calculated?
Lenders use the amortisation formula M = P × r ÷ (1 − (1 + r)^−n), where P is the amount borrowed, r is the monthly rate (APR ÷ 12) and n is the number of monthly repayments. Each repayment pays that month's interest first, and the rest reduces what you owe.
What are the monthly repayments on a £10,000 loan?
At 6.9% APR, a £10,000 loan costs £308.31 a month over 3 years, £197.54 over 5 years or £150.44 over 7 years. Your own repayment depends on the rate you're offered, so enter it in the calculator above.
What does representative APR mean?
Representative APR is the rate a lender advertises. The lender must expect at least 51% of the loans it agrees as a result of the advert to be at that rate or lower, so you could be offered a higher one. Use the personalised APR in your loan offer when you calculate repayments.
Is it better to take a loan over a shorter or longer term?
A shorter term means higher monthly repayments but less interest. For £10,000 at 6.9%, a 3-year term costs £1,099.30 in interest and a 7-year term costs £2,636.83. A longer term only makes sense if the lower repayment keeps your budget safe.
Does overpaying a loan reduce the interest?
Yes. Interest is charged on the balance, so overpayments cut future interest. Overpaying £50 a month on £10,000 at 6.9% over 5 years saves £439.83 and clears the loan 13 months early. Check whether your lender charges a fee for overpaying.
Can I pay off a personal loan early in the UK?
Yes. You have a legal right to repay a regulated personal loan early, in full or in part. On a fixed-rate loan, the lender can only charge a fee if you repay more than £8,000 early in any 12 months. The fee is capped at 1% of the amount repaid if more than a year of the loan is left, or 0.5% if less, and can never be more than the interest you would have paid. Ask your lender for a settlement figure.