Loan Repayment Calculator
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Understanding loan repayments
What this calculator covers and how the numbers are worked out
How it works
This calculator is for any loan you repay in equal monthly instalments - a repayment/amortising loan - which covers most personal loans, car finance agreements and repayment mortgages. Enter how much you want to borrow, the interest rate and how long you'll take to repay it, and the calculator works out the fixed monthly payment needed to clear the loan exactly by the end of the term.
Each monthly payment is made up of two parts: interest on the amount you still owe, and a bit of the original capital. The lender works out a payment amount that stays the same every month but shifts in composition over time - early payments are weighted heavily towards interest, because the outstanding balance is still large, while later payments are weighted towards capital, because the balance has shrunk and there's less interest to charge on it.
As a worked example, borrowing £10,000 over 5 years (60 months) at 6% APR works out to a monthly payment of about £193.35. Over the full 60 months you would pay back roughly £11,601 in total, meaning about £1,601 of that is interest on top of the £10,000 you borrowed.
Stretching the same £10,000 loan out over 7 years (84 months) instead of 5 lowers the monthly payment to about £146.14 - useful if you need lower payments to fit your budget - but the total interest paid rises to around £2,276, roughly £675 more than the 5-year term, because you're paying interest for longer even though the rate hasn't changed. This trade-off between monthly affordability and total cost is worth weighing up carefully before choosing a longer term.
APR stands for Annual Percentage Rate, and it's the yearly cost of borrowing expressed as a single rate that includes both the interest and any mandatory fees. Lenders are legally required to quote APR so that loans with different interest rates, fees and structures can be compared on a like-for-like basis.
Overpaying a loan - paying more than the required monthly amount, or making a one-off lump-sum payment - reduces the outstanding balance faster and cuts the total interest you'll pay, because less of the balance is left to accrue interest each month. However, some lenders charge an early repayment fee for overpaying beyond a certain amount, so it's worth checking your loan agreement before doing this.
A common gotcha is assuming a loan's monthly interest rate is simply the APR divided by 12 with nothing else to consider, and forgetting that a big share of early payments goes on interest rather than reducing what you owe - which is why paying off a loan early in its term, rather than late, tends to save the most interest overall.
What this calculator covers
- Fixed monthly repayments
- Total interest over the loan term
- How APR affects your repayment
- Effect of a longer loan term
Common questions
The calculator finds the payment amount that, when charged interest on the reducing balance every month, brings the loan to exactly zero on the final payment - the same principle used by personal loans, car finance and repayment mortgages.
Your monthly payment goes down, but you pay interest for longer, so the total interest over the life of the loan goes up. For example, a £10,000 loan at 6% APR costs about £1,601 in interest over 5 years but around £2,276 over 7 years.
APR includes both the interest rate and any mandatory fees, expressed as a single yearly percentage, which is why it's the figure lenders must quote to let you compare loans fairly.
Yes, for a standard repayment mortgage where you pay off both interest and capital every month in fixed instalments, the same maths applies as for a personal loan or car finance.
Interest is charged on the balance still outstanding, which is at its highest right at the start of the loan, so a larger slice of your payment goes on interest early on and a larger slice goes on capital later, once the balance has fallen.
Yes - overpaying reduces the balance sooner, which cuts the interest that builds up afterwards. Just check your loan agreement first, since some lenders charge an early repayment fee.
It assumes a fixed rate for the whole term. If your loan has a variable rate, use the current rate as a guide - your actual payments will change if the rate moves.
No - a longer term means more months of interest charged on the outstanding balance, so the total amount repaid is higher over a longer term even though the interest rate hasn't changed.
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These results are estimates for general guidance and are not financial advice. Always confirm important figures with an official source.
Rates last reviewed: 2 October 2026 · Built around the 2026/27 UK tax year
Based on 2026/27 UK tax rates. Results are estimates and not financial advice.
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