Loan Payment Calculator
Calculate monthly loan repayments and total interest for any loan.
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About loan repayments
- How is a monthly loan payment calculated?
- Monthly loan payments are calculated using the standard amortisation formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan principal, r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments. This ensures each payment covers both the interest for that month and a portion of the outstanding principal.
- What is the difference between total payment and total interest?
- Total payment is the sum of all monthly repayments over the full loan term — this includes the original loan amount (principal) plus all interest charged. Total interest is purely the extra amount you pay beyond the principal. For example, a £10,000 loan with £3,200 total interest means your total payment is £13,200.
- How does loan term length affect repayments?
- A longer loan term lowers your monthly payment but significantly increases the total interest you pay over the life of the loan, because interest accrues on the outstanding balance for more months. A shorter term means higher monthly payments but much less total interest paid overall.
- What is an amortisation schedule?
- An amortisation schedule shows how each payment is split between interest and principal repayment over the life of the loan. In the early months, a larger share of each payment goes towards interest. As the principal decreases, the interest portion shrinks and more of each payment reduces the outstanding balance.
- Is this calculator financial advice?
- No. This tool is for educational and illustrative purposes only. Results assume a fixed interest rate with no fees, charges, or payment holidays. Actual loan terms will vary by lender. Always consult a qualified financial adviser or speak directly with your lender before taking out a loan.