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Loan Repayment Calculator

Updated August 2026 Personal Finance

Work out what a loan will really cost. Enter the amount you want to borrow, the annual interest rate and the term to see your monthly payment, the total interest and how the balance reduces each year.

This models a standard amortising loan — equal monthly payments over a fixed term at a fixed rate.

Your details

The APR or interest rate quoted by the lender

Results

Monthly repayment
£198.01
Over 5 years at 7%
Total repaid
£11,880.72
Total interest
£1,880.72
Amount borrowed
£10,000.00

Year-by-year breakdown

End of year 1£8,269.02 outstanding
End of year 2£6,412.91 outstanding
End of year 3£4,422.62 outstanding
End of year 4£2,288.45 outstanding
End of year 5£0.00 outstanding

Outstanding balance each year

8,269
0
£8,269Year 3£0

How the calculation works

We believe numbers should be transparent. Here is the formula behind this calculator.

Monthly payment = P × r ÷ (1 − (1 + r)^−n) where r = annual rate ÷ 12, n = months

Worked example

Worked example: a £10,000 loan over 5 years at 7%

Borrow: £10,000. Rate: 7% a year. Term: 5 years (60 months).
Monthly rate = 7% ÷ 12 = 0.5833%.
Monthly payment ≈ £198.01.
Total repaid ≈ £11,880.57, of which interest ≈ £1,880.57.

Important assumptions

  • Assumes a fixed interest rate and equal monthly payments for the full term.
  • Does not include arrangement fees, early repayment charges, payment holidays or variable rates.
  • For a true APR comparison, check the representative APR and total amount payable on the lender’s quote.

Frequently asked questions

How is the monthly repayment calculated?

Lenders use an amortisation formula: each month you pay interest on the remaining balance plus a slice of the capital. Because the balance shrinks, the interest portion falls over time.

Why is the total interest not just rate × amount × years?

Because you repay the capital as you go, the average balance is far less than the full amount. Simple-interest maths overstates the cost of an amortising loan.

Should I use APR or the interest rate?

APR (annual percentage rate) includes fees, so it is the fairest comparison between lenders. This calculator uses the interest rate, so add any arrangement or origination fees separately.

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These calculations are estimates for guidance only and are not professional financial, tax or legal advice. UK rates and rules change, so always verify important figures with official GOV.UK / HMRC information or speak to a qualified professional. See our full disclaimer.