Loan Interest Calculator
Our loan interest calculator breaks down every monthly repayment into its interest and capital components, showing exactly how much of each payment reduces your balance and how much goes to the lender as interest. This amortisation view reveals how front-loaded interest is in the early months of any loan.
Personal Loan Interest Calculator
Calculate total interest, monthly payments and see an amortisation schedule for your personal loan.
How Loan Interest Is Charged
Each month, interest is calculated on the current outstanding balance. On a £15,000 loan at 9.9% APR over 4 years, month 1 interest is £123.75 and capital repayment is £254.71. By month 40, interest is just £3.12 and capital repayment is £375.34. Total interest paid is £2,226. Extra payments reduce the outstanding balance immediately, cutting interest in all future months. Use our Cut Loan Costs Calculator to model the saving from any overpayment, and our Personal Loan Calculator to compare the full cost at different APRs.
Overpayment Strategies That Work
Three approaches reduce total loan interest without changing the rate: regular overpayments (pay an extra fixed amount each month); lump-sum overpayments (apply a bonus or windfall directly to the balance); or term shortening at remortgage (request a shorter term on renewal). For most borrowers, regular overpayments are the most practical — even £50 extra per month on a £15,000 loan at 9.9% saves approximately £320 in interest and cuts the term by 4 months. The key is to confirm with your lender that overpayments reduce the outstanding balance immediately rather than being held as advance payments of future instalments — some lenders default to the latter unless instructed otherwise.
Frequently Asked Questions
For fixed-rate personal loans (the majority), yes — the rate and monthly payment are fixed for the full term.
Yes — this calculator shows the interest and capital split for every month of the loan term, not just the totals.
The total cost of credit is the total amount you repay minus the amount borrowed. It is the most important number when comparing loans of the same amount.
A 2% APR difference on a £10,000 loan over 3 years costs approximately £315 extra in total interest.
Missing a payment triggers a default notice, late payment fee, and a negative mark on your credit file that remains for 6 years. Always contact your lender immediately if you anticipate difficulty.
Enter your existing loan balance, current interest rate, and remaining term. The calculator shows how much of each monthly payment goes to interest versus capital, and the total interest remaining on the current loan. This is useful for deciding whether to overpay, switch lender, or simply continue the existing arrangement. Compare the total remaining interest against the interest on a new loan at a lower rate — taking into account any early repayment charge on the existing loan and any arrangement fee on a new one. The APR comparison ensures like-for-like comparison — a lower headline rate with a significant arrangement fee may not be cheaper overall than a slightly higher rate with no fee.
Important Information
This calculator is provided for general information and planning purposes only. It does not constitute financial or tax advice and should not be relied upon as such. Figures are indicative estimates based on simplified, publicly available criteria and stated assumptions. Actual results depend on your full circumstances. See our Disclaimer for further information.