Loan Repayment Calculator

Monthly repayments are calculated using the standard amortisation formula: M = P × r(1+r)^n ÷ ((1+r)^n − 1), where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments. This spreads principal and interest evenly so your payment stays the same every month, though the split between interest and capital shifts over time.

With a repayment loan each monthly payment covers both interest and a portion of the capital, so the balance falls to zero at the end of the term. With an interest-only loan you pay just the interest each month — your monthly payment is lower, but the original balance is still owed in full at the end. Interest-only personal loans are uncommon; the structure is more typical on mortgages.

At a representative APR of 7%, a £10,000 loan costs approximately £308/month over 3 years (total interest £1,083), £231/month over 5 years (total interest £1,848), or £198/month over 5 years at 9.9% APR. Your actual rate depends on your credit score — lenders quote a representative APR but typically offer lower rates to applicants with excellent credit.

A shorter term means higher monthly payments but significantly less total interest. A £10,000 loan at 7% costs £1,083 interest over 3 years, versus £2,814 over 7 years — a difference of £1,731. Choose the shortest term whose monthly payment fits comfortably within your budget, leaving room for unexpected expenses. Avoid stretching to 5–7 years just to minimise the monthly figure if you can manage a 3-year payment.

Yes — most UK personal loans allow early repayment. Lenders can charge an early repayment fee of up to 58 days' interest under the Consumer Credit Act. To check your specific loan, look for the Early Repayment Charge (ERC) in your credit agreement. Paying off early usually saves more in interest than the fee costs, especially if you are less than halfway through the term.

0% purchase credit cards are cheapest for amounts under ~£5,000 if you can repay within the promotional period (usually 18–24 months). For larger amounts or longer terms, a personal loan typically offers rates from 5–12% APR depending on credit score. Credit unions often beat high-street lenders for members. Avoid payday or doorstep loans for amounts above £1,000 — their effective APRs can exceed 1,000%.

The calculator uses the flat annual interest rate you enter. APR (Annual Percentage Rate) can be slightly higher than the stated interest rate because it includes arrangement fees and some other charges. If your lender quotes an APR with no fees, the APR and interest rate are the same. To get the most accurate figure, use your lender's actual quoted APR as the input.