Monthly payment calculator
Instalment amount when the term is quoted directly in months.
Calculator inputs
Results
Enter your values and press “Calculate” to see the result.
In short
- What it calculates
- Instalment amount when the term is quoted directly in months.
- Formula used
Payment = P × i × (1 + i)ⁿ / [(1 + i)ⁿ − 1]- Example
- £8,000 at 9% over 36 months:
Monthly payment calculator
The same idea as the loan calculator, but built for finance deals advertised directly in months: 12, 24, 36 or 48.
It is the typical setup for appliance, technology or course financing.
How it works
The annual rate is divided by twelve and the constant-payment formula is applied over the number of months given. You also see how much of the first instalment is pure interest.
Formula
Payment = P × i × (1 + i)ⁿ / [(1 + i)ⁿ − 1]
i = annual rate ÷ 12
n = term in months
Interest in the first payment = P × i
Worked example
£8,000 at 9% over 36 months:
Payment: £254.44
Total paid: £9,160
Interest: £1,160
Interest in the first payment: £60
Explanation
The monthly payment is not the figure that matters
Stretching the term lowers the payment and raises the total cost, sometimes considerably. A ten-year loan has comfortable payments and can end up costing twice the interest of the same capital over five. Before signing, always look at the total paid, not just what leaves your account each month.
APR and nominal rate are not the same
The nominal rate is only the interest. The annual percentage rate also includes arrangement fees, assessment fees and other mandatory charges, and it is the only figure that lets you compare offers from different banks. A loan with a low nominal rate and a high arrangement fee can have a worse APR than an apparently dearer one.
Tied insurance products
Many offers condition the rate on taking life or home insurance with the same institution. That cost does not always enter the advertised APR, so add it separately before comparing.
Early repayment
The earlier you repay capital, the more interest you save, because the early years carry the heaviest interest load. Check whether the contract has an early repayment fee and what the legal cap is.
Frequently asked questions
What if the finance is interest free?
Enter 0 as the rate: the payment is simply the amount divided by the number of months.
Why does the first payment carry so much interest?
Because interest is charged on the outstanding balance, which at the start is the full amount.
What should I compare between two loans?
The APR and the total repayable, not the monthly payment. A low payment can hide a long term and a much higher final cost.
How much does early repayment save?
More the earlier it is done, because in the first years the interest share of each payment is highest. Check the applicable fees.
Need to calculate something else?
These tools are often used alongside this calculator.
Loan
Work out the monthly payment on a loan and how much interest you will pay.
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.
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.
Investment
Future value of an investment and what it is really worth after inflation.