Loan Calculator

A loan calculator shows what a personal loan, car loan or other fixed-term borrowing will really cost before you sign. Enter the amount, the rate and the term to see the monthly repayment, the total interest, the total cost of credit and a full repayment schedule. Our free calculator handles an APR, a plain interest rate with fees, or a flat rate as some car finance quotes show, and converts each to an approximate APR so you can compare like with like. Turn on comparison to put two loans side by side and see which is cheaper overall. Everything runs in your browser and nothing is stored.

How to use the Loan calculator

1. 1 Enter the amountType how much you want to borrow. Commas are fine, so 12,500 works as well as 12500.
2. 2 Choose the type of ratePick APR if your quote shows an APR, Interest rate for a nominal annual rate before fees, or Flat rate if interest is charged on the original amount for the whole term.
3. 3 Set the term and any feesEnter the term in months or years. For an interest rate or flat rate, add any compulsory upfront fees so the calculator can work out the APR.
4. 4 Compare a second loanClick Compare another loan and enter the second quote. The side-by-side table highlights the lower monthly payment and the cheaper total cost.
5. 5 Read the scheduleSwitch between monthly and yearly views to see how each payment splits into interest and capital, then copy a summary or download the schedule as a CSV.

APR and interest rate are not the same thing

The interest rate is the price of borrowing the money itself, quoted as a yearly percentage. The APR, or annual percentage rate of charge, is a wider measure of the total cost of credit. In the UK it includes the interest and any compulsory fees you must pay to take out the loan, such as an arrangement fee, and it is expressed as an annual rate that accounts for the timing of every payment. That makes it the fairest single number for comparing loans with different fees, terms and payment patterns.

Because interest on a loan is usually charged monthly, an APR is higher than the nominal rate even when there are no fees. A loan at 7% a year charged monthly works out at about 7.23% APR, because each month's interest is calculated on a balance that already reflects the previous month. Add a £200 arrangement fee to a £10,000 five-year loan at 7% and the APR rises to about 8.1%, even though the interest rate has not changed. Choose Interest rate in the calculator and add the fee to see this for yourself.

Representative APR and the rate you are offered

Adverts for loans in the UK usually show a representative APR. Under the Financial Conduct Authority's rules, at least 51% of the people who take out the loan as a result of the advert must be offered that rate or better. That means up to 49% may be offered a higher rate, depending on their credit history, income and the amount they borrow.

So treat an advertised rate as a starting point, not a promise. Many lenders offer an eligibility check that uses a soft search, which does not affect your credit score, and shows a personalised rate before you apply. Put the personalised APR into the calculator rather than the headline figure to see the repayment you are likely to get.

Flat rates can be misleading

A flat rate charges interest on the original amount for the whole term, even though you pay the loan down every month. On a £10,000 loan over five years, a 5% flat rate means £500 of interest a year, £2,500 in total, whatever the balance. Because you are paying interest on money you have already repaid, the true cost is much higher than the flat figure suggests. In this example the APR is about 9.5%, nearly double the headline number.

Flat rates sometimes appear in older car finance and dealer quotes, and in some business lending. Lenders offering regulated consumer credit must show the APR as well, so always compare that figure. The calculator converts any flat rate into an approximate APR automatically and shows a note explaining the difference.

How repayments and the schedule are worked out

The calculator assumes a standard repayment loan with equal monthly payments. Each month, interest is charged on the balance still owed, and the rest of the payment reduces the balance. Early payments are mostly interest, and later payments are mostly capital, which the schedule shows clearly. The last payment is adjusted by a fraction of a penny so the balance ends at exactly zero.

When you enter an APR, the calculator converts it to the equivalent monthly rate, in line with how APR is defined in the UK, and uses that to work out the payment. When you enter an interest rate, it divides the rate by 12. Real agreements calculate interest to the day and may round each payment, so your lender's figures can differ slightly, but the calculator is accurate enough to compare quotes and plan a budget.

• Total interest is everything you pay above the amount borrowed, through the monthly payments.
• Total cost of credit is the interest plus any fees you entered.
• Total repaid is the amount borrowed plus the total cost of credit.

Comparing two loans properly

The cheapest loan is the one with the lowest total cost over the period you actually need the money, not always the one with the lowest monthly payment. Stretching a loan from three years to five years makes each payment smaller but usually adds a lot of interest. The side-by-side view puts both totals next to each other and tells you which loan is cheaper overall and by how much.

Compare loans over the same term where you can, and use APRs from personalised quotes. If one loan is for a different term, decide which matters more to you: a lower monthly payment that fits your budget, or a lower total cost. Remember that personal loan rates often vary by amount, so borrowing slightly more or less can move you into a different rate band.

Your rights and things to check before you borrow

Most personal loans are regulated credit agreements under the Consumer Credit Act. You normally have 14 days after signing to withdraw, as long as you repay the money and any interest for the days you had it. You also have the right to repay early, in full or in part. The lender may charge a limited early settlement fee, so check the agreement if you think you might clear the loan early.

It is also worth asking what happens if you miss a payment. Late payment fees and extra interest can add to the cost, and missed payments are usually reported to the credit reference agencies, which can make future borrowing harder and more expensive. If you think you may struggle, contact the lender early, as many will discuss a temporary arrangement before the account falls into arrears.

Before you apply, check that the monthly payment fits comfortably in your budget with room for unexpected costs, and that you are not borrowing for longer than you need. If you are struggling with existing debts, free and impartial help is available from MoneyHelper, Citizens Advice and StepChange. This calculator is for illustration only and is not financial advice.

Examples you can copy

Amount            £10,000
Term              5 years (60 payments)
APR               7.9%

Monthly payment   about £200.99
Total interest    about £2,059
Total repaid      about £12,059

Amount            £10,000 over 5 years
Flat rate         5% a year
Interest          £10,000 × 5% × 5 = £2,500
Monthly payment   £12,500 ÷ 60 = £208.33
Equivalent APR    about 9.5%

Monthly rate from APR:  i = (1 + APR)^(1/12) − 1
Monthly payment:        M = P × i ÷ (1 − (1 + i)^−n)
APR from monthly rate:  APR = (1 + i)^12 − 1

Common mistakes to avoid

Frequently asked questions