Loan repayment calculator
Work out the monthly payment, total repayable and interest on a personal loan from the amount, APR and term, and compare the same loan over 1 to 7 years.
- A month for 5 years
- £195.23
- 60 payments on £10,000 at 6.6% APR
- Total repayable
- £11,713.80
- all the payments added up
- Interest
- £1,713.80
- what the loan costs you
- Interest rate
- 6.41%
- a year, the fixed rate lenders quote beside the APR
The same loan over other terms
- 1 year£350.48 interest
- £862.54 a month
- 2 years£681.20 interest
- £445.05 a month
- 3 years£1,018.52 interest
- £306.07 a month
- 4 years£1,363.04 interest
- £236.73 a month
- 5 years£1,713.80 interest
- £195.23 a month
- 6 years£2,071.52 interest
- £167.66 a month
- 7 years£2,436.20 interest
- £148.05 a month
6.6% APR is 6.4084% a year charged monthly, or 0.534% a month.
This uses the APR as the FCA defines it, with no fees, and rounds the payment to the penny, as lenders’ own examples do. An advertised APR is representative: only 51% of the people a lender accepts have to get it or better, so use the rate in your quote. It doesn’t include payment protection or early repayment charges.
What goes in
Enter what you want to borrow, the APR and how long you’ll take to pay it back, in years or months. Use the APR from your own quote if you have one. An advertised rate is representative: only 51% of the people a lender accepts have to get it or better, so you could be offered more.
What the result means
The monthly payment is fixed for the whole term. Borrowing £10,000 over 5 years at 6.6% APR costs £195.23 a month, £11,713.80 in all, so the loan costs £1,713.80 in interest.
The table shows the same loan over other terms. A longer term lowers the monthly payment but adds interest. The same £10,000 over 7 years is £148.05 a month, but £2,436.20 in interest.
How the APR turns into a payment
The APR is a yearly rate that includes compounding. The FCA’s formula treats a month as a twelfth of a year, so 6.6% APR works out at 0.534% a month, or 6.4084% a year as the fixed rate lenders quote next to it. The payment is the fixed amount that clears the loan with interest on the balance each month, rounded to the penny.
That’s the method behind lenders’ representative examples, and it reproduces them to the penny. It assumes no arrangement fees, which the APR would otherwise include. It also leaves out payment protection and any charge for paying off early.
Sources
- CONC App 1.2: Formula for calculating the APR, FCA Handbook
- Personal loans, MoneyHelper