Loan calculator
Enter the loan amount, annual interest rate and term to get your monthly payment.
Loan calculator: monthly payment and interest
This loan calculator estimates your monthly payment from the amount, the annual interest rate and the term, and tells you the total interest and total cost you will pay. It works for personal, car and consumer loans. Everything runs in your browser, with no sign-up.
How the payment is calculated
A fixed-payment loan uses the amortisation formula:
Where M is the monthly payment, P the principal, r the monthly interest rate (the annual rate divided by 12 and by 100) and n the number of payments (years × 12). The payment is constant, but the split between interest and principal changes every month.
Early on, most of the payment is interest because the outstanding balance is high; over time each payment repays more principal. That is why paying down early saves a lot of interest.
Key vocabulary
- Principal — the amount you borrow.
- Interest rate (APR vs nominal) — the nominal rate goes in the formula; the APR adds fees.
- APR — includes fees and charges; the fair figure for comparing offers.
- Term — the number of months to repay.
- Amortisation — repaying the loan in regular instalments.
Worked example
You borrow £15,000 at 8% a year over 5 years (60 payments). The monthly payment is about £304. In total you repay roughly £18,250, of which around £3,250 is interest. Shorten the term to 3 years and the payment rises, but you pay much less interest.
Frequently asked questions
Is a longer term better? It lowers the payment but raises total interest, because you borrow the money for longer. Choose the shortest term your budget allows.
Why compare by APR, not the headline rate? Two loans with the same nominal rate can have very different APRs once fees are included. APR reflects the true cost.
Can I repay early? Usually yes; early repayments remove interest from the rest of the term. Check for any early-repayment fees.