Loan Payment Calculator
Enter the loan amount, interest rate and term — see your monthly payment, total cost and principal vs interest breakdown instantly.
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Find a better rate by comparing current offers.
Estimates only. Actual APR, fees and insurance are set by the lender's agreement.
How the loan payment calculator works
Enter the loan amount (how much you want to borrow), the annual interest rate (use the nominal rate, not APR), and the loan term in years or months. The monthly payment, total repayment and interest update in real time as you type.
The donut chart shows the split between principal (what you borrowed) and interest (the cost of borrowing). The lower the rate and the shorter the term, the smaller the interest slice. On a 25-year mortgage the interest can easily exceed the original principal — the chart makes this visible at a glance.
The maths behind the result
- Monthly payment = P × r × (1+r)ⁿ / ((1+r)ⁿ − 1)
- P = loan amount · r = annual rate ÷ 12 ÷ 100 · n = number of monthly payments
- Total cost = monthly payment × n · Total interest = total cost − P
Frequently asked questions
How is the loan payment calculated?
Using the annuity (equal-payment) formula: payment = P × r × (1+r)ⁿ / ((1+r)ⁿ − 1), where P is the principal, r is the monthly rate (annual rate ÷ 12) and n is the number of monthly payments.
Does the calculator include fees and insurance?
No — the calculator uses only the loan amount and nominal interest rate. APR (which includes fees, insurance and other charges) varies by lender and is stated in the loan agreement.
Is my data sent anywhere?
No. Everything runs locally in your browser — no figures are transmitted to any server.
What is a typical personal loan interest rate in the UK?
Representative APRs for UK personal loans in 2024/25 range from about 6% (for prime borrowers, £7,500–£15,000) to 40%+ for smaller or bad-credit loans. The average for £10,000 over 5 years is roughly 7–9% APR.
How your monthly loan payment is calculated
Almost every personal loan, car loan and mortgage in the UK is an amortising loan: you repay it in equal monthly instalments, and each instalment is part interest, part principal. Early on, most of the payment covers interest; as the balance shrinks, more and more of each payment goes towards clearing the debt itself. The calculator above uses the standard annuity formula that lenders use:
payment = P × r / (1 − (1 + r)−n), where P is the amount borrowed, r is the monthly interest rate (annual rate ÷ 12) and n is the number of monthly payments.
Three inputs drive everything. The amount borrowed scales the payment proportionally — borrowing 10% more costs 10% more per month. The interest rate compounds over the whole term, so even a single percentage point matters far more than most people expect. And the term is a genuine trade-off: stretching the loan lowers the monthly payment but raises the total interest, because you rent the money for longer.
Worked example
Borrow £10,000 at 6.9% APR over 5 years. The monthly rate is 6.9% ÷ 12 = 0.575%, and there are 60 payments. The formula gives a payment of £197.54 per month, so you repay £11,852 in total — £1,852 of interest.
Shorten the same loan to 3 years and the payment rises to £308.31, but total interest falls to £1,099 — a saving of over £750 just from the term. If the higher payment fits your budget comfortably, the shorter term almost always wins.
How to get a cheaper loan
- Compare the APR, not the headline rate. APR includes arrangement fees, so it is the only number that lets you compare offers fairly.
- Check the total amount repayable. Lenders must disclose it; it exposes long-term loans that look cheap monthly.
- Overpay when allowed. Under UK rules, lenders can charge at most about 1% of the overpaid amount on most personal loans, and many charge nothing. Overpayments hit the principal directly, cutting future interest.
- Mind your credit score before applying. Each hard application leaves a footprint; use soft-search eligibility checkers first.
- Beware of “representative” APR. Only 51% of accepted applicants must receive it — your personal rate can be higher.
Additional questions
Why is the first payment mostly interest?
Interest is charged on the outstanding balance, which is largest at the start. With each payment the balance falls, so the interest share of the next payment falls too. This is why overpaying early in the term saves the most.
Is a longer term ever the right choice?
Yes — when the lower payment protects you from missing payments or from expensive short-term borrowing elsewhere. A missed payment costs more (in fees and credit damage) than the extra interest of a longer term. Choose the shortest term you can hold comfortably, not heroically.
Does this calculator work for mortgages?
The mathematics is identical for a repayment mortgage with a fixed rate. Bear in mind that mortgage rates usually change after the fixed period ends, so treat the result as valid for the fixed window rather than the whole 25-year term.