Loan Repayment Calculator
Monthly repayments and total interest for a personal loan or car finance - plus a side-by-side table showing how the term changes what you really pay.
Reading a loan quote like a sceptic
Three numbers define any personal loan: the amount, the APR and the term. The monthly payment falls out of those via the same amortisation formula mortgages use - and the comparison table above shows the trade lenders don't dwell on: a longer term makes the monthly figure friendlier while quietly growing the total interest. £10,000 at 6.9% costs about £197/month over 5 years (≈£1,840 interest) but £115/month over 10 years (≈£3,850 interest). Same loan, double the interest.
APR vs the rate you'll actually get
The advertised "representative APR" only has to be offered to 51% of accepted applicants. The other 49% can legally be offered a higher rate after applying, and you won't know which side of the line you're on until you've applied. Soft-search eligibility checkers (most price-comparison sites have them) show a personalised likely rate without marking your credit file - use one before a full application.
Cutting the real cost
- Borrow at the band edges. Loan pricing jumps at thresholds - £7,500-£15,000 is traditionally the cheapest band per pound, so borrowing £7,500 sometimes costs less per month than £7,000.
- Shorter term if you can hold it. The table above makes the saving explicit for your own numbers.
- Overpay when allowed. UK lenders must let you repay early (a charge of up to ~1-2 months' interest can apply); even irregular overpayments cut total interest. Citizens Advice explains your early-repayment rights under the Consumer Credit Act in plain English.
- 0% alternatives for smaller sums. For purchases under a few thousand pounds, a 0% purchase credit card paid off within its promotional window beats any loan APR.
Borrowing against your home instead? Mortgage borrowing is priced very differently - start with the mortgage calculator, and if you already have one, the overpayment calculator applies the same "shorter is cheaper" logic to it.
Frequently asked questions
How are loan repayments calculated?
With the standard amortisation formula: monthly payment = P × r ÷ (1 - (1 + r)^-n), where P is the amount borrowed, r the monthly rate (APR ÷ 12) and n the number of monthly payments. Each payment covers that month's interest first, with the remainder reducing the balance.
What is a good APR for a personal loan in the UK?
It varies with the amount, term and your credit profile - larger loans in the £7,500-£15,000 band usually attract the lowest advertised rates. Whether a rate is "good" for you depends on your credit file; use a soft-search eligibility checker to see personalised rates without affecting your score.
Why did the lender offer me a higher rate than advertised?
The representative APR must only be given to 51% of accepted applicants. If your credit profile puts you in the other 49%, the lender can offer a higher rate. You're free to decline it and try elsewhere - ideally via soft-search tools that don't leave footprints.
Can I pay a loan off early?
Yes. Under the Consumer Credit Act you can repay a personal loan early at any time; the lender may charge up to around one to two months' interest on the amount repaid early. Even so, early repayment almost always saves money overall.
Is car finance the same as a personal loan?
Not quite. A personal loan buys the car outright, so you own it immediately. PCP and HP are secured on the vehicle, often with different rate structures, mileage limits and balloon payments. Compare the total amount payable across all options, not just the monthly figure.