Loan Calculator
Free repayment calculator — monthly loan repayments, total interest & amortisation
Enter how much you want to borrow, the interest rate and the term, and you'll see the monthly repayment, the total you'll hand back, and how much of that is interest. There's a year-by-year table underneath showing the balance falling, so you can see how slowly it moves at first and how quickly it drops towards the end.
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Amortisation Schedule
Annual breakdown of principal vs interest payments
| Year | Principal Paid | Interest Paid | Balance |
|---|
Why the early payments barely dent the balance
Most loans are repaid on an amortising schedule, which means every monthly payment is split between interest and capital. At the start, when the balance is largest, the interest slice is largest too, so relatively little of your payment actually reduces what you owe. As the balance falls, the interest shrinks and more of each payment goes to capital, which is why the last year clears far faster than the first.
The practical upshot is that overpaying early — even modestly — saves disproportionately more interest than the same overpayment made later, because you're knocking out the balance while it's still doing the most damage. The APR quoted on a loan folds in fees as well as interest, so it's the fairer figure for comparing two deals.
❓ Frequently Asked Questions
How is a monthly loan repayment calculated? ▼
Monthly repayments use the standard amortisation formula: M = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments. This ensures the loan is fully paid off at the end of the term.
What is an amortisation schedule? ▼
An amortisation schedule is a table showing each payment period — how much of each payment goes toward interest and how much reduces the principal balance. Early payments are mostly interest; later payments are mostly principal.
How does the interest rate affect my repayments? ▼
Higher interest rates increase both your monthly payment and the total amount repaid. For example, on a £10,000 loan over 5 years, moving from 5% to 10% APR increases monthly payments by roughly £25 and total interest by over £1,400.
What is the difference between APR and interest rate? ▼
The interest rate is the base cost of borrowing. APR (Annual Percentage Rate) includes the interest rate plus any fees charged by the lender, making it a more complete measure of the true cost of credit. This calculator uses the interest rate you enter directly.
Should I choose a shorter or longer loan term? ▼
A shorter term means higher monthly payments but much less total interest paid. A longer term reduces monthly payments but significantly increases the total cost. Use the calculator to compare scenarios by changing the term length.
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