🏦 UK Loan Calculator

Calculate monthly payment and total interest based on loan amount, interest rate, and term.

Monthly Payment

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Loan Amount — Total Interest — Total Payment —

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Inputs and calculation

The calculator has three fields. Loan Amount is the amount of an unsecured personal loan that you want to borrow, entered in pounds. Annual Interest Rate is the percentage that the calculation applies for one year. Loan Term is the repayment period in years. The script multiplies the entered years by 12, so a term such as 2.5 produces 30 monthly payments even though the label says years. Each change triggers a fresh calculation. The result assumes one equal payment every month and no change to the rate or term. It shows the calculated monthly payment, repeats the principal, and gives total interest and total payment. The pound amounts are displayed to two decimal places. Valid amount, rate and term entries may contain decimals; on blur, a field is reformatted with locale-appropriate grouping and decimal separators only when the formatted value preserves the entered number. These fields do not ask about income, existing debts, fees, payment dates, or the reason for borrowing. The result is therefore a repayment illustration, not a lender quote, affordability decision, or credit approval.

Repayment formula

The script treats the entered annual rate as a nominal annual rate and divides it by 12. It does not convert a quoted effective APR into an equivalent monthly rate. Let P be the Loan Amount, r be the entered percentage divided by 100 and then by 12, and n be the Loan Term in years multiplied by 12. The monthly payment M is P times r times (1 + r) to the power n, divided by ((1 + r) to the power n minus 1). For a zero rate, M is simply P divided by n. The formula produces a level-payment amortisation model. Conceptually, each month interest accrues on the remaining balance at r, the payment covers that interest, and the rest reduces principal. The code does not build or display those monthly balance steps; it calculates the same level payment directly. It then multiplies M by n for Total Payment and subtracts P for Total Interest. It retains full JavaScript precision until each result is formatted as pounds and pence.

Worked example

Suppose you enter a Loan Amount of £20,000, an Annual Interest Rate of 5.5%, and a Loan Term of 5 years. These are user assumptions for demonstrating this calculator, not a statement about available UK loan rates. The script sets the monthly rate to 0.055 divided by 12 and the number of payments to 5 times 12, which is 60. Substituting those values in the repayment formula produces a monthly payment that the page displays as £382.02. For its totals, the script keeps unrounded internal values instead of multiplying the displayed £382.02. It displays £22,921.39 in payments and £2,921.39 in interest. A real lender may round each collected instalment and adjust the final one by a few pence. This example also shows why the displayed monthly figure may not multiply exactly to the displayed total when you work only with rounded values.

Reading the results

Monthly Payment is the modelled equal instalment for the term you entered. Loan Amount is the principal copied from the form, not a balance that falls as payments are made. Total Interest is Total Payment minus Loan Amount. Total Payment is the unrounded monthly result multiplied by the calculated number of months. The doughnut chart compares principal with modelled interest; it does not show a monthly schedule or the outstanding balance. None of these figures includes an arrangement fee paid separately, a fee added to the advance, optional insurance, late charges, broker charges, or a lender's early settlement adjustment. The tool also has no field for a payment holiday, overpayment, lump sum, or changing rate. If an offer includes a compulsory fee within its disclosed APR, typing that APR here still applies the percentage as though it were only a nominal interest rate. Use the lender's stated total amount payable as the controlling comparison figure when it differs from this simplified output.

UK personal loans

This page models a standard UK unsecured personal loan: you receive a fixed amount and repay it through regular instalments without giving the lender security over your home or car. A fixed-rate, fixed-term agreement fits the calculator's level-payment structure. The agreement itself controls the actual payment dates, charges, and settlement terms. This is different from a mortgage secured on land, student finance collected under an income-based plan, and car products with a deposit, optional final payment, or ownership conditions. Those products need their own calculations. UK credit advertising may show a representative APR. A representative APR is an advertising comparison figure selected under FCA rules, not a promise that every successful applicant will receive that rate. Your personal quote may differ after the lender assesses your circumstances. APR is designed to reflect interest and relevant compulsory credit charges on a comparable annual basis, whereas this script treats whatever percentage you enter as interest divided evenly into twelve monthly rate periods.

FCA lending checks

Firms carrying on regulated consumer lending generally need the appropriate Financial Conduct Authority authorisation or an applicable exemption. The FCA Consumer Credit sourcebook requires a lender to make a reasonable creditworthiness assessment before entering into a regulated agreement. That assessment addresses both credit risk to the lender and affordability risk to you. The lender may use information you provide and, where needed, information from a credit reference agency. It must have proper regard to whether repayments could adversely affect your financial situation, not merely whether the calculator produces a payment below a number you chose. Credit reference agencies may hold different information about the same person. An eligibility or quotation check may use a soft search, which other lenders do not see as an application. A lender may use a hard search for a full application; if it does, that search is visible to other credit providers. Check which type will be used before submitting details. The calculator performs no search, sends no application, and cannot predict acceptance or the rate a lender will offer.

Consumer Credit Act rights

A regulated personal loan can carry rights under the Consumer Credit Act 1974. For many covered agreements, you may withdraw without giving a reason within 14 days from the relevant statutory starting point. Withdrawal ends the credit agreement, but it does not make money already used free: you must return the credit and pay the contractual interest accrued for the time you had it. Early repayment is a different process. You can ask the lender for a settlement figure, and the statutory mechanism gives a rebate of charges allocated to the part of the agreement being settled early. The lender's figure can therefore differ from this calculator's remaining principal or a simple sum of future displayed payments. Section 75 concerns certain purchases made through a qualifying debtor-creditor-supplier arrangement. It can make the creditor liable with the supplier for misrepresentation or breach of contract within the section's scope. It does not automatically attach to every cash personal loan or every way you spend loan proceeds. Check the agreement and transaction structure rather than treating this calculator as a test of legal coverage.

Fees and tax

Start with the amount that will actually be advanced and identify every compulsory charge. If a fee is deducted before the money reaches you, the Loan Amount needed to fund a purchase may be higher than the cash you receive. If a fee is added to the credit, interest may be charged on that larger balance. This calculator has no fee field, so model an added fee only by including it in Loan Amount, then keep any separately paid charge outside the displayed total. Do not assume the result recreates the lender's APR calculation, because APR rules account for relevant charges and timing while this script uses only one percentage and equal monthly periods. For ordinary private spending, personal loan repayments do not become an income tax deduction merely because you borrowed. HM Revenue and Customs applies separate rules where borrowing funds a trade or property business. For an unincorporated business, interest may be deductible when incurred wholly and exclusively for the business, while a private or mixed-use part may be disallowed or apportioned. The calculator does not estimate relief, business accounts, or tax.

Comparing offers

Run each offer with the same Loan Amount and the term actually quoted. Compare Monthly Payment for cash-flow pressure, then compare Total Payment rather than choosing the smallest instalment. A longer term can lower the monthly figure while increasing the time over which interest is charged. Enter your personal quoted rate, not only the representative rate from an advert. Then place the calculator result beside the lender's pre-contract information: amount of credit, APR, instalment amount, number and timing of payments, total amount payable, fees, and early repayment terms. A difference is a prompt to find the missing assumption, not evidence that either figure is automatically wrong. Ask whether an eligibility check is soft before making several applications, since hard application searches are visible to other lenders. Avoid comparing an unsecured personal loan here with a PCP, hire purchase agreement, mortgage, or student loan as if the cash flows were identical. This page has no deposit, balloon payment, security, income threshold, or variable-rate stage for those structures.

Model limits

The model assumes the first and every later payment are exactly one month apart, the entered rate stays fixed, interest compounds through equal monthly periods, and every payment is made on time. It does not use calendar days, a lender's daily-interest convention, or an irregular first period. It also assumes the number of payments is Loan Term times 12. The interface does not enforce a maximum term or require whole months. Very small fractional years can therefore create a fractional payment count, which is mathematically accepted by the formula but does not describe a normal instalment schedule. Inputs must be complete finite numbers written with valid locale grouping and decimal separators; a typed pound sign, malformed grouping, partial numeric prefix or surrounding whitespace is invalid. Negative amounts and rates are rejected, and Loan Term must be above zero. An invalid entry clears the current figures to dashes, hides the chart and shows an error instead of retaining the previous result. Results are formatted to two decimal places, but the totals use unrounded internal values. Confirm the lender's own illustration, agreement, and settlement quote before relying on a borrowing decision.

Frequently asked questions

Does the calculator convert APR to a monthly rate?

No. It divides the percentage you enter by 100 and then by 12. That treats the input as a nominal annual rate with monthly periods. A lender's disclosed APR may also reflect compulsory charges and payment timing, so entering that APR does not always reproduce the lender's instalment.

Why does the monthly payment not multiply exactly to the total?

The monthly payment is displayed to the nearest penny, but Total Payment is calculated from the unrounded internal payment. Multiplying the displayed instalment yourself can therefore differ by a few pence. A lender may also round collected instalments and adjust its final payment.

Are loan fees included?

No. The form has fields only for principal, annual rate, and years. Include a fee in Loan Amount only if it is added to the balance and will bear interest. Keep a separately paid fee outside the displayed result, then add it when comparing overall cost.

Can I use the result as an early settlement figure?

No. The calculator does not track a payment date or outstanding balance and does not apply the statutory early settlement rebate mechanism. Ask the lender for a settlement statement, which applies the agreement and Consumer Credit Act rules to a specific settlement date.

What does representative APR mean?

It is an advertising comparison figure determined under FCA rules, not a guaranteed personal rate. A lender can offer you a different rate after checking creditworthiness and affordability, so compare using your quoted terms.

Does checking a scenario affect my credit file?

No. This calculator performs no credit search and sends nothing to a lender. A separate eligibility checker may use a soft search. A lender may use a hard search for a full application; if it does, that search is visible to other credit providers. Confirm the search type before applying.