Calculate your monthly loan repayment, total interest, and full repayment cost for any personal loan, car loan, or credit facility. Free, instant, browser-based.
£202.76
Monthly payment
£2,165.84
Total interest
£12,165.84
Total repayable
Outstanding balance over 5 years
A longer loan term reduces your monthly payment but significantly increases the total interest you pay. A 5-year loan at 8% costs far less overall than the same loan spread over 10 years, even though the monthly payments are lower.
A 0% finance deal sounds free, but lenders often inflate the purchase price to compensate. Always compare the total amount repayable, not just the monthly payment or headline rate.
Even small overpayments each month reduce your outstanding balance faster, which cuts the interest charged on subsequent months. On a £10,000 loan at 8% over 5 years, overpaying £50/month could save over £200 in interest.
Lenders sometimes quote a flat interest rate rather than APR. A flat rate of 4% on a reducing-balance loan is actually closer to 8% APR because you are charged interest on the original balance, not the remaining one.
Secured loans (backed by an asset like your home) typically offer lower rates but put that asset at risk if you miss payments. Unsecured personal loans carry higher rates but no collateral risk. Always match the loan type to its purpose.
Many fixed-rate loans charge a fee if you repay early — often 1–2 months of interest. Check your agreement before overpaying or settling early. On short loans the saving may not outweigh the penalty.
Calculate your monthly loan repayment, total interest, and full repayment cost for any personal loan, car loan, or credit facility. Enter the loan amount, annual interest rate, and term to see an instant breakdown and amortisation chart.
£10,000 at 8% APR over 5 years
Monthly: £202.76 | Total interest: £2,165.60
£25,000 at 6% APR over 7 years
Monthly: £365.07 | Total interest: £5,665.88
£5,000 at 12% APR over 3 years
Monthly: £166.07 | Total interest: £978.52
Amortisation formula: M = P × [r(1+r)^n] / [(1+r)^n − 1]
Monthly payment: £202.76
The word 'amortisation' comes from the Old French 'amortir', meaning to kill or deaden. When you amortise a loan you are gradually 'killing off' the debt with each payment. The modern amortisation schedule — showing exactly how much of each payment is interest versus principal — was formalised in the late 19th century as banks standardised consumer lending.
A loan repayment calculator works out your monthly payment, total interest, and total amount repayable based on the loan amount, annual interest rate, and term. It uses the standard amortisation formula so each result reflects a real reducing-balance loan.
The monthly payment uses the standard amortisation formula: M = P × [r(1+r)^n] / [(1+r)^n - 1], where P is the principal, r is the monthly interest rate (annual rate divided by 12), and n is the number of monthly payments.
Both use the same amortisation maths, but mortgages are secured against property, have much longer terms (typically 15–30 years), and usually carry lower interest rates. Personal loans are unsecured and typically run 1–7 years.
The two most effective ways are: choose a shorter loan term (higher monthly payments but far less interest overall), and make overpayments when you can afford to. Even one extra payment per year can meaningfully reduce total cost.
APR (Annual Percentage Rate) includes the interest rate plus any mandatory fees, expressed as a yearly figure. It is the most reliable way to compare loan costs across lenders because it reflects the true annual cost of borrowing.