Personal loan
- Input
- £20,000 at 7% for 5 years
- Output
- £396/month · £3,761 interest
A five-year term keeps total interest under 20% of the amount borrowed. Stretching to seven years drops the payment to £302 but raises interest to £5,364.
Loan Calculator
A loan calculator shows the periodic repayment on a fixed-rate loan and what it costs in total. The repayment is the number people ask for; the total interest is the number that decides whether the loan is a good idea. Both are shown together here, along with a schedule that reveals how slowly the balance falls in the early years.
Runs entirely in your browser — your figures are never uploaded.
How much will my loan cost in total?
Total loan cost is the monthly repayment multiplied by the number of payments. A £20,000 loan at 7% over 5 years costs £396 a month and £23,761 in total — £3,761 of interest on top of the amount borrowed.
This calculator is a computation tool, not financial advice. Lender fees and rounding rules vary; confirm any figure with the lender before committing.
£
%
Annual rate, as quoted by the lender
years
Monthly repayment
£396
60 payments over 5 years
- Principal
- £20,000
- Total interest
- £3,761
- Total repaid
- £23,761
- Principal — 84%
- Interest — 16%
£
An extra amount added to every payment
Repayment schedule
| Period | Principal | Interest | Balance |
|---|---|---|---|
| Year 1 | £3,462 | £1,290 | £16,538 |
| Year 2 | £3,712 | £1,040 | £12,826 |
| Year 3 | £3,981 | £772 | £8,845 |
| Year 4 | £4,268 | £484 | £4,577 |
| Year 5 | £4,577 | £175 | £0 |
The final payment settles the remaining balance exactly, so the schedule closes at zero rather than drifting.
The maths
Loan Calculator formula
Formula
Payment = P × r × (1 + r)^n / ((1 + r)^n − 1)
- P
- Principal — the amount borrowed
- r
- Interest rate per period
- n
- Total number of payments
Worked example
A £20,000 personal loan at 7% a year over 5 years
Inputs
- Principal (P)
- £20,000
- Annual rate
- 7%
- Monthly rate (r)
- 0.07 ÷ 12 = 0.0058333
- Payments (n)
- 5 × 12 = 60
Working
- (1 + r)^n = 1.0058333^60 = 1.41763
- Numerator: 20,000 × 0.0058333 × 1.41763 = 165.39
- Denominator: 1.41763 − 1 = 0.41763
- Payment = 165.39 ÷ 0.41763
Payment = £396.02 a month. Total repaid £23,761, of which £3,761 is interest.
How to
How to use the Loan Calculator
- 1
Enter what you are borrowing
Put in the loan amount. If you are trading in or paying a deposit, enter only the balance you actually need to finance.
- 2
Enter the rate and term
Use the annual rate the lender quoted. Try two or three terms — the effect on total interest is usually larger than people expect.
- 3
Compare the totals
Look at the total repaid rather than only the monthly figure. Two loans with similar repayments can differ by thousands over the full term.
- 4
Test an overpayment
Add a regular extra amount to see how many months it removes. Overpaying early has a disproportionate effect because the balance is largest then.
Examples
Loan Calculator examples
The cost of a longer term
- Input
- £20,000 at 7% for 10 years
- Output
- £232/month · £7,878 interest
Halving the monthly payment more than doubles the interest. The repayment is what you can afford; the total is what it costs.
Overpaying by £50 a month
- Input
- £20,000 at 7% for 5 years, +£50
- Output
- Finishes 7 months early · saves £791
A small regular overpayment shortens the term because every extra pound goes straight to principal, removing all the future interest it would have carried.
Why use it
What the Loan Calculator gives you
Total cost, front and centre
The total repaid and total interest sit beside the monthly figure, so a cheap-looking payment on a long term does not mislead.
Overpayment modelling
See exactly how many months and how much interest a regular extra payment removes, which is the most reliable way to cut the cost of a loan.
An accurate schedule
The amortisation table is built from the unrounded payment and closes at zero, so the figures reconcile rather than drifting.
Private by construction
Nothing about the amount you want to borrow leaves your browser.
Good to know
Loan Calculator limitations
- Assumes a fixed rate. Variable-rate loans change the payment or the term whenever the benchmark moves.
- Arrangement fees, early-repayment charges and insurance are excluded; these can add materially to the real cost.
- Assumes payments are made on time. A missed payment adds interest and usually a fee.
- APR quoted by lenders includes compulsory fees, so a lender's APR may exceed the nominal rate entered here.
Summary
Loan Calculator in short
- The repayment formula is the same annuity formula used for EMI.
- Total interest, not the monthly payment, is the true cost of a loan.
- Doubling the term more than doubles the interest paid.
- Regular overpayments shorten the term disproportionately.
- All figures are computed in your browser and never uploaded.
FAQ
Loan Calculator questions
How do I work out the total cost of a loan?
Multiply the periodic payment by the number of payments, then subtract the amount borrowed to isolate the interest. A £20,000 loan at 7% over 5 years repays £23,761 in total, so the interest is £3,761.
Is a shorter term always cheaper?
In total interest, yes — less time means less accrued interest. But the payment is higher, and a term you cannot comfortably afford risks missed payments and fees, which cost more than the interest saved.
Why is the lender's APR higher than the rate I entered?
APR bundles compulsory fees into a single annualised figure, while the nominal rate does not. If a loan carries an arrangement fee, its APR will exceed the interest rate, and the APR is the fairer basis for comparison.
Does overpaying actually save money?
Yes, and more than most people expect. An extra payment reduces the principal immediately, so all the future interest that principal would have attracted disappears. Overpayments made early save the most.
Does paying fortnightly instead of monthly help?
It usually does, for an arithmetic reason: 26 fortnightly payments equal 13 monthly payments a year rather than 12. The extra payment goes entirely to principal, shortening the term.
What is the difference between a secured and unsecured loan?
A secured loan is backed by an asset the lender can claim if you default, so rates are lower. An unsecured loan is not, so rates are higher. The repayment maths is identical; only the rate differs.
How much can I borrow?
Lenders assess income, existing commitments and credit history, and commonly cap total debt payments near 40% of net income. That is their risk threshold, not a target — borrowing to the maximum leaves no margin.
How should I compare two loan offers?
Compare total repaid over the same term, including fees. A lower monthly payment on a longer term almost always costs more overall, so aligning the terms before comparing is essential.
Are my borrowing figures stored?
No. The calculation runs entirely in your browser and nothing is transmitted. There is no account, no logging and no record of what you entered once the tab is closed.
Discover
Related calculators
EMI CalculatorWork out the monthly instalment on any loan, with a full amortisation schedule that closes at zero and shows exactly what goes to interest.Compound Interest CalculatorProject savings growth with any compounding frequency and regular contributions. Both parts use the same frequency, so the result is consistent.ROI CalculatorCalculate return on investment as a percentage and the annualised CAGR. Simple ROI ignores time — both figures are shown side by side.