How it works
Repayment uses the standard amortisation formula, with annual interest divided by 12.
A worked example
A 10,000 loan at 6% over 36 months costs about 304.22 per month.
What to keep in mind
Nominal annual rate, fixed for the term. No fees, insurance, balloon payments or early repayments. APR including fees may produce a different result.
How loan repayments are calculated
Most personal loans are repaid in equal monthly instalments. Each payment covers that month’s interest and repays part of the balance, so the balance falls faster towards the end of the loan. The calculator uses the standard amortisation formula with the annual rate divided by 12.
Worked example
Borrowing £10,000 at 6% over 36 months costs about £304.22 a month. The total interest is about £952, so you repay about £10,952 in total.
Shorter or longer loan terms
Spreading the same £10,000 at 6% over 60 months lowers the payment to about £193.33 a month, but the total interest rises to about £1,600. Choose the shortest term you can comfortably afford to keep the overall cost down.
APR versus interest rate
Lenders advertise a representative APR, which includes compulsory fees as well as interest. If a loan has an arrangement fee, the APR will be higher than the interest rate and the true cost higher than this estimate.
Frequently asked questions
How much is a £10,000 loan per month?
At 6% over 3 years, about £304 a month. Over 5 years, about £193 a month.
How much is a £5,000 loan over 2 years?
At 8%, about £226 a month, with about £427 of interest in total.
Does this include arrangement fees?
No. It models principal and interest only. Add relevant fees separately when comparing offers.
Can I pay a loan off early?
Usually, yes. UK lenders can charge an early repayment fee, often up to around one or two months’ interest. Check your loan agreement.
For general information and planning, not personalised financial or tax advice. Verify important decisions with a qualified adviser.