Loan Calculator
Calculate fixed-rate loan payments, estimate a maximum loan from a monthly budget, or find the implied interest rate from a known payment.
Loan Details
Enter your loan information.
Your Loan Breakdown
Monthly Payment
GBP 188.71
A GBP 10,000.00 loan over 5 years at 5% costs GBP 188.71 per month.
Summary
Amortisation Schedule (First 12 Months)
| Month | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | GBP 188.71 | GBP 147.05 | GBP 41.67 | GBP 9,852.95 |
| 2 | GBP 188.71 | GBP 147.66 | GBP 41.05 | GBP 9,705.30 |
| 3 | GBP 188.71 | GBP 148.27 | GBP 40.44 | GBP 9,557.02 |
| 4 | GBP 188.71 | GBP 148.89 | GBP 39.82 | GBP 9,408.13 |
| 5 | GBP 188.71 | GBP 149.51 | GBP 39.20 | GBP 9,258.62 |
| 6 | GBP 188.71 | GBP 150.13 | GBP 38.58 | GBP 9,108.48 |
| 7 | GBP 188.71 | GBP 150.76 | GBP 37.95 | GBP 8,957.72 |
| 8 | GBP 188.71 | GBP 151.39 | GBP 37.32 | GBP 8,806.34 |
| 9 | GBP 188.71 | GBP 152.02 | GBP 36.69 | GBP 8,654.32 |
| 10 | GBP 188.71 | GBP 152.65 | GBP 36.06 | GBP 8,501.66 |
| 11 | GBP 188.71 | GBP 153.29 | GBP 35.42 | GBP 8,348.37 |
| 12 | GBP 188.71 | GBP 153.93 | GBP 34.78 | GBP 8,194.45 |
About This Loan Calculator
This loan calculator is for fixed-rate instalment loans such as personal loans, car finance, home improvement borrowing, or other repayment loans. Enter a loan amount, annual interest rate, and term to estimate the monthly payment, total repayment, and total interest.
The three modes cover different questions. Monthly Payment calculates the payment for a known loan. Max Loan works backwards from a monthly budget. Find Rate estimates the implied annual interest rate when you know the loan amount, term, and monthly payment.
For standard monthly-payment mode, the calculator also shows the first 12 months of the amortisation schedule so you can see how each payment splits between principal and interest.
This calculator does not include upfront fees, APR, insurance, taxes, early repayment charges, or variable rates. Use the APR calculator when fees need to be included, and use the loan comparison calculator when you are comparing several offers.
Loan Payment Example
Suppose you borrow GBP 10,000 over 5 years at an annual interest rate of 7%. The monthly payment is about GBP 198, and the total repaid over the full term is roughly GBP 11,880.
That means the interest cost is around GBP 1,880. The loan may look affordable month to month, but the total interest number is what lets you compare it properly against a shorter term, a lower rate, or a larger deposit.
If the same loan is repaid over three years instead of five, the monthly payment rises, but the total interest usually falls. This is the core trade-off in most instalment loans: longer terms lower the monthly pressure but increase the lifetime cost.
Why Total Interest Matters
Many borrowers focus only on the monthly payment because that is the number that affects the budget immediately. Lenders know this, which is why long terms can make expensive borrowing feel manageable. A payment that is GBP 40 lower per month may cost hundreds or thousands more over time.
Total interest is the price of spreading repayment over time. It is affected by the rate, term, fees, payment schedule, and whether interest compounds monthly. When comparing loans, look at the monthly payment, total repaid, total interest, fees, and any early repayment rules together.
Common Loan Comparison Mistakes
A common mistake is comparing loans by headline rate alone. Arrangement fees, broker fees, compulsory insurance, and early repayment charges can change the true cost, but those costs are not included in this calculator unless you handle them separately.
Another mistake is borrowing the maximum possible amount simply because the payment fits today. A safer approach is to leave room for income changes, unexpected bills, rate changes on other debts, and emergency savings. A loan should fit your wider financial life, not just pass a monthly payment test.
Reading the result with real-world context
Monthly Payment mode uses loan amount, annual rate, and term to estimate the fixed instalment.
Max Loan mode works backwards from a monthly budget to estimate the amount that budget can support.
Find Rate mode estimates the annual rate implied by a known loan amount, term, and monthly payment.
Fees, insurance, taxes, early repayment charges, and variable-rate changes are not included.
Common mistakes to avoid
Choosing the longest term simply because the monthly payment is lowest, without checking total interest and flexibility.
Treating Max Loan as an affordability approval rather than a formula based on your entered budget, rate, and term.
Ignoring arrangement fees, broker costs, compulsory insurance, or early repayment penalties when comparing headline rates.
How to combine this with related calculators
Use apr when the loan has upfront fees and you need a fee-aware borrowing-cost estimate.
Use loan comparison when you have two or three offers to compare by monthly payment, interest, fees, and total cost.
Use amortisation when you need payment frequency, extra-payment, yearly schedule, or full schedule views.
When to revisit the numbers
Rates, income, prices, and goals change — rerun the calculator after a material life event, not only when the original result felt wrong.
For loans, also review when rates move, when a fixed period ends, or when lender fees change.
Keep a note of the assumptions you used so you can tell later whether the plan changed because of maths or because circumstances moved.
How to Use This Calculator
- 1
Choose your calculation mode
Monthly Payment calculates your fixed monthly instalment given a loan amount, rate, and term. Max Loan works backwards from your monthly budget to find the maximum you can borrow. Find Rate reveals the implied interest rate when you know the loan amount, term, and payment amount.
- 2
Enter your loan details
Provide the loan amount (or budget), annual interest rate, and the loan term in years. All three inputs are needed for the standard monthly payment calculation.
- 3
Read the loan breakdown
The results show your monthly payment, total amount paid over the life of the loan, and the total interest charge. The first 12 months of the amortisation schedule show how each payment is split between principal and interest.
- 4
Compare loan options
Change the interest rate or term to see how they affect your monthly payment and total cost. A lower rate or shorter term both reduce total interest - but a shorter term increases the monthly payment. Find the balance that works for your budget.
Frequently Asked Questions
What types of loans can I calculate?
This calculator works for fixed-rate instalment loans such as personal loans, car finance, home improvement loans, and business loans. It does not apply to revolving credit like credit cards or overdrafts, where the balance and payment vary month to month. For home loans, use the mortgage calculator because it includes deposit and affordability modes.
How is the monthly payment calculated?
The monthly payment is calculated using the standard amortisation formula: M = P × r(1+r)^n / ((1+r)^n − 1), where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments. This formula ensures that each payment covers the interest accrued that month plus a portion of the principal, so the loan reaches exactly zero at the end of the term.
Should I pay off my loan early?
In most cases yes - paying extra reduces the principal faster, which reduces the interest charged on subsequent months. Even small overpayments can save a meaningful amount over the life of the loan. However, always check your loan agreement for early repayment charges. Some lenders charge a fee if you pay off early, which can offset the interest savings on shorter loans.
What is a good interest rate for a personal loan?
A competitive personal loan rate depends on the market, amount borrowed, loan term, credit profile, security, and lender criteria. Compare the APR across lenders when possible because APR can include mandatory fees. This calculator uses the interest rate you enter and does not decide whether a rate is good for your circumstances.
Does this loan calculator include fees?
No. It estimates payment, total repayment, and interest from loan amount, annual rate, and term. If upfront fees are important, use the APR calculator or add fees separately when comparing the full cost.
Is the Loan Calculator financial advice?
No. It is a general planning estimate based on the values you enter. Confirm important borrowing, investing, tax, or property decisions with qualified professionals and official terms from lenders or providers.
How often should I update my inputs?
Update when rates, income, prices, rent, contributions, or goals change materially. For most household finance decisions, reviewing every few months or after a major change is enough.
Why might this differ from my lender quote?
A lender quote may include fees, insurance, exact payment dates, daily interest rules, eligibility rules, or rounding. This calculator estimates payment from the amount, rate, term, and budget values you enter.