Calculate your monthly repayment, total cost, and full amortisation schedule for any personal, car, or business loan.
The total amount you wish to borrow
Check your lender's representative APR
Longer terms mean lower monthly payments but more total interest
Monthly Payment
£192.86
Total Interest
£1,571.80
Total Cost
£11,571.80
Cost Breakdown
This loan calculator uses the standard amortisation formula to compute your fixed monthly repayment. Enter the loan amount (the sum you wish to borrow), the annual interest rate (the APR quoted by your lender), and the loan term in years. The calculator instantly displays your monthly payment, the total interest you will pay over the life of the loan, and the total amount you will repay. You can also expand the full amortisation schedule to see exactly how each monthly payment is split between principal reduction and interest.
The monthly repayment on a fixed-rate loan is calculated using the standard amortisation formula:
M = P × [r(1+r)^n] / [(1+r)^n − 1]
Where: M = monthly payment, P = principal loan amount, r = monthly interest rate (annual rate ÷ 12), n = total number of payments (years × 12)
For example, a £10,000 loan at 5.9% APR over 5 years gives a monthly rate of 5.9% ÷ 12 = 0.4917%. With 60 payments, the formula produces a monthly repayment of approximately £192.40. Over the full term, you would repay £11,544 in total — meaning £1,544 in interest on top of the £10,000 borrowed.
One of the most important decisions when taking out a loan is choosing the right term. A shorter term means higher monthly payments but significantly less total interest paid. A longer term reduces the monthly burden but increases the overall cost of borrowing. The table below illustrates this trade-off for a £10,000 loan at 5.9% APR:
| Term | Monthly Payment | Total Interest | Total Repaid |
|---|---|---|---|
| 1 Year | £859 | £308 | £10,308 |
| 2 Years | £443 | £632 | £10,632 |
| 3 Years | £304 | £944 | £10,944 |
| 5 Years | £192 | £1,544 | £11,544 |
| 10 Years | £111 | £3,320 | £13,320 |
When comparing loan offers, you will encounter two figures: the interest rate and the Annual Percentage Rate (APR). The interest rate is the base cost of borrowing, expressed as a percentage of the outstanding balance. The APR is a broader measure that includes the interest rate plus any mandatory fees (arrangement fees, broker fees, etc.), making it the more accurate figure for comparing the true cost of different loans. In the UK, lenders are legally required to display the representative APR, which is the rate offered to at least 51% of successful applicants. Your personal rate may differ based on your credit score and financial circumstances.
There are several practical strategies to minimise the total cost of a loan. First, improving your credit score before applying can secure you a lower interest rate — even a 1% reduction on a £10,000 loan over 5 years saves approximately £260 in interest. Second, making overpayments when your budget allows reduces the outstanding principal faster, cutting both the term and the total interest. Many lenders allow overpayments of up to 10% of the outstanding balance per year without penalty. Third, avoid extending the loan term simply to reduce monthly payments — the long-term cost increase is rarely worth the short-term relief. Finally, always compare the APR across multiple lenders rather than the headline interest rate, as fees can significantly alter the true cost of borrowing.
What is an amortisation schedule?
An amortisation schedule is a complete table showing every monthly payment over the life of a loan, broken down into the portion that reduces the principal balance and the portion that pays interest. In the early months of a loan, the majority of each payment goes towards interest. As the balance decreases, a growing proportion of each payment reduces the principal — this is the amortisation effect.
Can I use this calculator for a car loan?
Yes. This calculator works for any fixed-rate instalment loan, including personal loans, car finance, and business loans. Simply enter the amount financed, the APR quoted by the lender, and the repayment term. For hire purchase (HP) or personal contract purchase (PCP) car finance, the calculation is the same, though PCP deals typically involve a large balloon payment at the end of the term which this calculator does not model.
What happens if I miss a payment?
Missing a loan payment typically results in a late payment fee, a negative mark on your credit file, and additional interest accruing on the outstanding balance. If you are struggling to make repayments, contact your lender before missing a payment — most lenders offer payment holidays or restructuring options that are far less damaging than a missed payment.
Is this calculator accurate for UK loans?
Yes. The calculator uses the standard amortisation formula used by UK lenders for fixed-rate loans. Results are displayed in GBP. Note that the calculator assumes a fixed interest rate throughout the term. Variable-rate loans will have payments that change when the base rate changes, which this calculator cannot model.
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