Loan calculator
Work out the monthly payment on a loan and how much interest you will pay.
Calculator inputs
Results
Enter your values and press “Calculate” to see the result.
In short
- What it calculates
- Work out the monthly payment on a loan and how much interest you will pay.
- Formula used
Payment = P × i × (1 + i)ⁿ / [(1 + i)ⁿ − 1]- Example
- £15,000 at 7.5% over 5 years (60 months):
Loan calculator
With the amount, the rate and the term you can see in seconds what a loan costs each month and, more importantly, how much extra you pay overall.
The standard constant-payment (amortising) system is used, the most common for personal loans.
How it works
In an amortising loan every payment is the same size, but its composition changes: early on it is mostly interest, later mostly capital.
The nominal annual rate is divided by twelve to get the monthly rate applied to each payment.
Formula
Payment = P × i × (1 + i)ⁿ / [(1 + i)ⁿ − 1]
P = loan amount
i = annual rate ÷ 12
n = number of months
Worked example
£15,000 at 7.5% over 5 years (60 months):
Monthly payment: £300.57
Total repayable: £18,034
Interest: £3,034
That is 20.2% more than you borrowed.
Explanation
The APR is the only comparable figure
The nominal rate measures interest alone. The annual percentage rate also incorporates compulsory fees and how they spread over time, which is why it is the only thing allowing comparison between different lenders. A loan with a low nominal rate and a high arrangement fee can have a worse APR than one that looked dearer.
Beware what is sold as optional
Life, payment protection or unemployment insurance is often offered as voluntary while conditioning the rate. If declining it raises the interest, it is not voluntary in practice and its cost should be added to the loan before comparing anything.
Repaying early saves most at the start
Under the French amortisation system, the first instalments are almost entirely interest because it is calculated on the outstanding balance, which is at its highest. Repaying in the early years removes future interest far more efficiently than doing so at the end, when almost everything you pay is capital.
Consolidating is not always worth it
Merging several debts into one with a lower payment almost always means extending the term, and that multiplies total interest even though the monthly relief is real. Before accepting, compare the total cost of the current situation with the new one.
Frequently asked questions
Does it include arrangement fees?
No. This calculation uses the nominal rate; to include fees, add them to the amount or compare using the APR.
What if I overpay early?
You cut future interest. You can simulate it by recalculating with the outstanding balance and remaining term.
Can I use it for a car loan?
Yes. The formula is the same for any constant-payment loan.
What should I compare between two loans?
The APR and the total repayable. A low monthly payment may simply reflect a long term, which makes the loan more expensive.
When is early repayment most worthwhile?
The sooner the better. In the early years the interest share of each instalment is highest, so that is where the saving is greatest.
Need to calculate something else?
These tools are often used alongside this calculator.
Monthly payment
Instalment amount when the term is quoted directly in months.
Mortgage
Monthly payment, total interest and the cash you need upfront to buy a home.
Compound interest
See what your money becomes with regular contributions and reinvested interest.
Simple interest
Work out the interest a principal earns without reinvestment, in years, months or days.
Discount
Final price after a discount and exactly how much you save.
Savings
How much you will accumulate by saving a fixed amount every month for several years.