How this calculator works
This Loan Repayment Estimator uses the standard amortising loan formula that underpins almost all UK personal loans: a fixed monthly payment, calculated so that the loan (principal plus all accrued interest) is fully repaid by the end of the agreed term. Enter your loan amount, representative APR and term, and the calculator instantly shows your estimated monthly payment, the total amount you'd repay over the full term, and the total interest cost.
The theory: how amortisation actually works
An amortising loan is structured so that each monthly payment is the same fixed amount throughout the term, but the split between interest and capital repayment within that fixed payment changes over time. Early in the loan, a larger share of each payment goes toward interest (since it's calculated on the still-high outstanding balance), while a smaller share reduces the capital. As the balance falls, the interest portion of each payment shrinks and the capital repayment portion grows — though your total monthly payment itself stays constant throughout.
Why term length has such a big impact on total cost
Extending a loan's term reduces the monthly payment (spreading the same amount over more instalments), but it also means interest accrues for longer, generally increasing the total amount of interest paid overall — even if the APR itself stays exactly the same. This is one of the most important, and most commonly overlooked, trade-offs in personal loan borrowing: a lower monthly payment on a longer term can end up costing considerably more overall than a higher monthly payment on a shorter one.
Understanding representative APR
UK lenders are required to advertise a "representative APR" — the rate that at least 51% of successful applicants actually receive. Your own personal rate, based on your specific credit assessment, could be higher or lower than the advertised representative figure. Always check the actual APR offered to you specifically, ideally via a lender's soft-search eligibility checker, before assuming the advertised rate will apply to your own application.
Comparing multiple loan offers properly
When comparing loan offers from different lenders, it's essential to compare on a like-for-like basis: the same loan amount, the same term, and the actual (not just representative) APR each lender is prepared to offer you. A loan with a slightly higher APR but genuinely lower total fees can sometimes work out cheaper overall than one with a marginally lower headline rate — always compare the total amount repayable figure, not just the monthly payment or APR in isolation.
What this calculator doesn't include
This tool calculates standard interest-based repayment costs but doesn't account for any arrangement fees some lenders charge (increasingly rare for mainstream UK personal loans, but still worth checking), or any early repayment rebate you might be entitled to if you clear the loan ahead of schedule. For a more complete picture including fees, see our True Cost of Borrowing Calculator.
Using this calculator to plan affordability, not just compare rates
Beyond comparing lenders, this calculator is genuinely useful for testing affordability before you apply — adjusting the loan amount or term to see what monthly payment fits comfortably within your budget, rather than working backwards from a fixed amount you've already decided to borrow. It's worth checking the resulting monthly payment against your own Debt-to-Income ratio to get a realistic sense of how a lender might view the affordability of the loan alongside your existing commitments.
The bottom line
A loan's monthly payment is only half the story — the total amount repayable, driven by both the APR and the term length, tells you the true cost of borrowing. Use this calculator to compare different amounts, terms and rates side by side before committing to any specific loan offer, and always check the total interest figure alongside the monthly payment.