Loan repayment calculator
Enter the amount, the APR and the term to see the monthly repayment, the total interest and a year-by-year schedule. Add an overpayment to see how much sooner the loan clears and what that saves.
Year by year
The schedule below shows the contractual payments with no overpayment.
| Year | Opening balance | Paid | Interest | Closing balance |
|---|---|---|---|---|
| Year 1 | £10,000 | £2,370 | £636 | £8,265 |
| Year 2 | £8,265 | £2,370 | £512 | £6,407 |
| Year 3 | £6,407 | £2,370 | £380 | £4,417 |
| Year 4 | £4,417 | £2,370 | £238 | £2,284 |
| Year 5 | £2,284 | £2,370 | £86 | £0 |
How the calculation works
A personal loan is repaid in level instalments. Each month interest is charged on the balance still owed, at the APR divided by twelve, and the rest of the payment reduces the balance. Early in the term most of each payment is interest; by the end almost all of it is capital. The monthly amount is the single figure that brings the balance to exactly zero on the final payment, which is the standard amortisation formula that lenders and the MoneyHelper calculator use.
An overpayment goes entirely to the balance, because the interest for the month has already been covered by the contractual payment. That shortens the term rather than reducing the monthly amount, which is why a modest extra payment saves a disproportionate amount of interest. The schedule above runs the balance down month by month and groups the result by year, so the closing balance of one year is the opening balance of the next.
| Monthly rate | APR divided by 12, applied to the opening balance each month |
| Payment | the level amount that clears the balance over the term |
| Overpayment | reduces the balance directly; the term shortens and the interest falls |
| Fees | not modelled; a representative APR may already include them |
Worked example
Borrow £10,000 at 6.9% APR over 5 years. The repayment is £197.54 a month, so you repay £11,852 in total and £1,852 of that is interest. Add £50 a month and the loan clears in 3 years 11 months rather than 5 years, saving £440 in interest for £2,350 of extra payments made earlier than they would otherwise have been.
How to read the result
- The APR is treated as a flat monthly rate. Lenders compound daily or monthly and may add arrangement fees inside the representative APR, so the figure in your offer can be a few pounds different.
- Your rate may not be the representative one. Only 51% of accepted applicants have to receive the advertised APR. Run the calculator again with the rate actually offered before signing.
- Early settlement can carry a charge. Up to 58 days of interest on the amount repaid early, under the 2004 regulations. It is usually small next to the interest saved, but it is not zero.
- Fixed rates are the norm for personal loans. Unlike a mortgage, the payment does not move with the base rate, so the schedule above holds for the whole term if you pay as agreed.
Common questions
How much does a £10,000 loan cost a month?
At 6.9% APR over 5 years the repayment is about £197.54 a month. You repay £11,852 in total, of which £1,852 is interest. A lower rate or a shorter term brings the interest down; a longer term lowers the monthly figure but raises the total.
Does overpaying a personal loan save interest?
Yes. Interest is charged on the balance still owed, so every pound paid early stops earning interest for the lender. Adding £50 a month to the example above clears it in 3 years 11 months instead of 5 years and saves about £440. Check the agreement first: some lenders treat an overpayment as a partial early settlement and charge up to about two months' interest on the amount.
Can I pay off a UK personal loan early?
Yes. Under the Consumer Credit (Early Settlement) Regulations 2004 you can settle a regulated loan at any time. The lender can charge up to 58 days of interest on the amount repaid (28 days for loans of under a year) and must give you a settlement figure on request. For most borrowers the interest saved comfortably outweighs that charge.
What is the difference between APR and the interest rate?
The interest rate is the charge for borrowing. APR, the annual percentage rate, adds any compulsory fees and expresses the total cost as a single yearly rate, so it is the figure to compare between lenders. A "representative" APR is the rate at least 51% of accepted applicants receive; your own offer can be higher.
Is a longer loan term cheaper?
Cheaper each month, more expensive overall. On £10,000 at 6.9%, a 3 year term costs £308.31 a month and £1,099 in interest, while 7 years costs £150.44 a month but £2,637 in interest. Choose the shortest term whose payment you can keep up reliably.
What happens if I miss a loan payment?
The lender will usually charge a late payment fee, add interest on the missed amount and report the missed payment to the credit reference agencies, where it stays on your file for six years. If you expect to miss a payment, contact the lender first: they must consider a payment arrangement, and doing so before the due date protects your credit record better than a default.