Loan Calculator
Calculate monthly payments, total interest, and total cost for any loan.
Works for mortgages, car loans, personal loans, and student loans in any currency.
A loan calculator determines your monthly repayment, total interest paid, and total cost based on the loan amount, interest rate, and term. Understanding these numbers before borrowing prevents costly surprises.
Monthly payment formula: M = P × r(1 + r)ⁿ / ((1 + r)ⁿ − 1)
Where:
- M = monthly payment
- P = loan principal (amount borrowed)
- r = monthly interest rate (annual APR / 12)
- n = total number of monthly payments
Worked examples:
Car loan: Amount: £12,000, APR 6.9%, term 48 months r = 0.069/12 = 0.00575 n = 48 M = £12,000 × 0.00575 × (1.00575)⁴⁸ / ((1.00575)⁴⁸ − 1) M = £285.92/month Total repaid: £285.92 × 48 = £13,724 Total interest: £1,724
Personal loan: Amount: £8,000, APR 8.5%, term 36 months Monthly payment ≈ £252 Total interest paid ≈ £1,072
APR vs flat rate: Some lenders advertise a “flat rate” — this looks lower but applies to the original principal throughout the term, even as you repay it. An APR of 8% and a flat rate of 5% may cost similar amounts. Always compare APR.
Effect of loan term: Same £10,000 at 7% APR:
- 24 months: £448/month, £759 total interest
- 48 months: £239/month, £1,455 total interest
- 60 months: £198/month, £1,862 total interest
Longer terms = lower monthly payments but significantly more interest paid overall.
Early repayment: Most personal loans allow overpayment. Even small extra payments significantly reduce total interest and loan term. A £50/month extra payment on a £10,000 5-year loan at 7% saves over £300 in interest.