Loan repayment calculator
Monthly repayments on a personal loan, plus the part lenders are quieter about: what an arrangement fee does to the rate you are actually paying.
Your loan
Your result
Monthly repayment
£0.00
Show the repayment schedule
| Month | Payment | Interest | Capital | Balance |
|---|
What you still owe
Unlike a mortgage, a short loan clears in a fairly straight line, because there is less time for interest to dominate the early payments.
How this is worked out
Personal loans use the same annuity formula as a repayment mortgage. You pay the same amount each month, split between interest and capital, with the interest share falling as the balance drops.
monthlyRate = annualRate ÷ 100 ÷ 12
payment = loan × monthlyRate × (1 + monthlyRate)^months
÷ ((1 + monthlyRate)^months − 1)
The effective annual rate is worked out differently. It answers a harder question: given what you actually received and what you actually pay, what rate is that equivalent to? There is no formula that solves it directly, so the calculator searches for the rate that makes the payments balance the amount advanced. This is the same principle behind an advertised APR, though lenders follow a prescribed method that may round or treat fees slightly differently.
A worked example
Borrowing £10,000 at 9.9% over 36 months costs about £322 a month and roughly £1,600 in interest. Add a £300 fee to the loan and the monthly payment rises only slightly, but the effective rate jumps by roughly two percentage points. The fee is small in isolation and expensive as a rate, which is exactly why it is worth calculating.
What lenders advertise
An advertised rate is usually "representative", meaning at least 51% of accepted applicants get it or better. The rest are offered something higher, and you often only find out after applying. Rates also tend to step at round amounts: borrowing £7,500 can carry a lower rate than £6,000, which occasionally makes it cheaper to borrow more. Always compare the total repayable, not the monthly payment.
Before you take a loan
- Check for early repayment charges. Regulated loans allow early settlement, but the lender may add up to 58 days of interest.
- Watch the term. Stretching a loan lowers the monthly payment and raises the total cost, often substantially.
- Use eligibility checkers. A soft check shows your likely rate without leaving a mark on your credit file. Several full applications in quick succession can harm it.
- Consider what is cheaper. A 0% purchase card, an existing overdraft or an employer scheme may cost less than a loan, depending on the amount and how quickly you can repay.
If you are borrowing to cover a shortfall
A loan taken to keep up with existing payments or everyday bills is worth pausing over. It can work, but it can also make a difficult situation harder, particularly if the new payment is on top of what you already owe rather than replacing it. A free debt adviser can look at the whole picture and may see options that cost less. The services listed below are free, confidential and used to exactly this question.
What this assumes
The rate is fixed for the whole term, payments are made on time and in full, interest is charged monthly, and no charges beyond the fee you entered apply. Real agreements may calculate interest daily and may add fees for missed payments. Always check the loan agreement itself before signing.