Personal Loan Calculator
Calculate monthly payments and total cost for a personal loan.
What this calculator does
This personal loan calculator turns an amount, an interest rate, and a term in years into the fixed monthly repayment, the total interest paid, and the total amount repayable. Add an overpayment and it shows how much interest that removes and how much sooner the loan clears.
UK unsecured personal loans are straightforward products: fixed rate, fixed term, no security, regulated under the Consumer Credit Act. That makes the arithmetic exact. The judgement calls are which amount band to borrow in, how long a term to accept, and whether the rate you have actually been offered resembles the representative APR you saw advertised.
When to use it
The most common use is consolidating card and store card balances into one fixed repayment with a known end date. Run the loan repayment against the total of your current minimum payments — if the loan clears the debt in four years where minimums would take twelve, that is usually the decisive number rather than the rate.
It is also worth running the amount bands. Because UK lenders price in tiers, borrowing £7,500 at a headline rate can cost less overall than borrowing £6,500 at the rate charged on smaller sums. Testing figures either side of £5,000, £7,500, £15,000, and £25,000 takes a minute and occasionally saves hundreds.
Understanding the inputs
Loan amount is what you receive; UK personal loans rarely deduct arrangement fees from proceeds, unlike some other markets, so this is normally the figure you request.
Interest rate should be the APR you have been quoted after a soft-search eligibility check, not the representative rate from the advert. Term in years typically runs one to seven, and this is the input that quietly costs the most — the same balance over seven years rather than three can nearly double the interest. The extra monthly payment field models overpayments, which reduce the capital directly and can be requested at any time under your early settlement rights.
How is this calculated?
Monthly Payment = P[r(1+r)^n]/[(1+r)^n-1]. Total Interest = (Monthly Payment × n) − P.
A worked example
Take £10,000 at 7.9 percent APR over four years. The monthly repayment works out at about £244, total interest comes to roughly £1,696, and you repay around £11,696 altogether.
Stretching the same loan to seven years would drop the monthly figure by roughly £90 but push total interest past £3,000 — nearly double, for the same £10,000. Going the other way, overpaying by £50 a month clears the loan several months early and trims a few hundred pounds off the interest. The term is the lever that matters most, and it is set once at the outset.
Limitations and assumptions
This models a fixed-rate loan with no fees, no missed payments, and no early settlement charge. In practice a lender settling a loan early may charge up to 58 days' interest, and late payments attract fees and a credit file marker. Optional payment protection or insurance sold alongside the loan is not included.
The calculator cannot predict the rate you will be offered, which depends on your credit file and affordability assessment. It also assumes a personal loan is the right product. For balances you could clear inside a 0 percent balance transfer window, or for sums where a credit union would lend more cheaply, a loan may not be the best answer.
Common Questions
- What does representative APR actually mean?
- Under FCA rules, a lender advertising a representative APR must offer that rate or better to at least 51 percent of people whose applications are accepted. The other 49 percent can be quoted more. So the headline figure is a genuine rate someone gets, but not a rate you are entitled to.
- Why are rates lower on larger loans?
- UK personal loan pricing is banded, and the best rates usually sit in the £7,500 to £15,000 band. Below £7,500 rates step up noticeably. This produces an odd result where borrowing £7,500 can cost less in total than borrowing £7,000, so it is worth checking the band boundaries before settling on an amount.
- Will applying damage my credit file?
- A full application leaves a hard search visible to other lenders for a year, and several in quick succession look like distress borrowing. Use soft-search eligibility checkers first — they show your likely acceptance odds without leaving a mark. Your file sits with Experian, Equifax, and TransUnion, and they do not always hold the same data.
- Can I repay a personal loan early?
- Yes. Under the Consumer Credit Act you have a statutory right to settle early, and the lender must give you a rebate on future interest. They may charge up to 58 days' interest as compensation on loans over 12 months. Ask for a settlement figure — it will be lower than the sum of your remaining payments.
- What is the 14-day right to withdraw?
- For most regulated credit agreements you can withdraw within 14 days of the agreement being made or of receiving the terms. You then repay the capital plus interest for the days you held it, and nothing more. It is a genuine safety net if you have second thoughts about a loan you have just taken.
- Is a personal loan cheaper than a credit card?
- Generally yes on rate, but the bigger difference is discipline. Credit card rates commonly exceed 24 percent APR and minimum payments can keep a balance alive for a decade. A loan has a fixed end date and a payment that clears it. For balances you cannot repay inside a 0 percent transfer window, the loan usually wins.
- What is the difference between a secured and unsecured loan?
- Unsecured personal loans rely on your credit standing alone and typically cap around £25,000 to £50,000. Secured loans, often called second-charge mortgages, are tied to your property, allow larger sums and longer terms, and carry lower rates. The trade is severe: falling behind puts your home at risk, so the discount is not free.
- Does a guarantor loan make sense?
- Rarely as a first choice. Guarantor loans typically charge 25 to 50 percent APR and place a friend or family member on the hook for the whole debt if you miss payments. Before considering one, check credit union lending, which is rate-capped in the UK and far cheaper for borrowers with thin credit files.