How is my personal loan monthly payment calculated?

Your monthly payment is calculated using the standard annuity formula. The loan amount, annual interest rate, and term in months are combined to produce an equal monthly repayment that covers both principal and interest over the loan period.

What is a good APR for a personal loan in the UK?

As of 2026, competitive UK personal loan APRs range from around 3% to 7% for borrowers with good credit scores. Rates above 10% are common for smaller loans (under GBP 5,000) or borrowers with lower credit ratings. The representative APR advertised must be offered to at least 51% of successful applicants.

Does the loan term affect how much interest I pay?

Yes, significantly. A longer term means lower monthly payments but more total interest. For example, borrowing GBP 10,000 at 7% over 36 months costs approximately GBP 1,116 in interest, while the same loan over 60 months costs approximately GBP 1,881 in interest.

Can I pay off my personal loan early?

Most UK personal loans allow early repayment, but your lender may charge an early repayment fee of up to 58 days of interest (as per the Consumer Credit Act). Check your loan agreement for specific terms. Paying off early can save you significant interest.

Personal Loan Calculator

Calculate monthly repayments, total interest, and the total cost of a personal loan.

Updated for 2026/27 tax year

Published by UltraCalculatorsLast reviewed: 28 Mar 2026v1.0Sources:FCA: Consumer credit MoneySavingExpert: Loans guideEditorial PolicyEstimates only. Always consult a qualified professional.Report an issue

This calculator provides estimates for guidance only. It does not constitute financial advice. Actual loan rates, terms, and eligibility vary by lender. Always compare offers and seek independent financial advice before borrowing.

A personal loan is one of the most common forms of borrowing in the UK, used for everything from home improvements and car purchases to debt consolidation and weddings. Unlike a mortgage or secured loan, a personal loan is unsecured, meaning you do not need to put up your property or other assets as collateral. Instead, the lender assesses your creditworthiness, income, and affordability to determine whether to approve the loan and at what interest rate. Personal loans in the UK are regulated by the Financial Conduct Authority (FCA) under the Consumer Credit Act. Lenders must display a representative APR (Annual Percentage Rate), which must be offered to at least 51% of successful applicants. The APR includes both the interest rate and any mandatory fees, making it the most reliable way to compare loan costs between providers. The repayment structure of a personal loan is straightforward: you borrow a fixed amount, agree to a fixed interest rate and term, and make equal monthly payments until the loan is fully repaid. This predictability makes personal loans popular for planned expenses where you know exactly how much you need. Monthly payments remain the same throughout the term, making budgeting simple. UK personal loan rates vary significantly depending on the amount borrowed, the loan term, and your credit score. As of 2026, competitive rates for borrowers with good credit range from around 3% to 7% APR for loans between GBP 7,500 and GBP 25,000. Smaller loans (under GBP 5,000) and larger loans (over GBP 25,000) often carry higher rates. Understanding the total cost of borrowing, including monthly payments and total interest, is essential before committing to any loan.

How to Use This Calculator

To calculate the cost of your personal loan: 1. Enter the loan amount you wish to borrow. UK personal loans typically range from GBP 1,000 to GBP 50,000. The most competitive rates are usually available for loans between GBP 7,500 and GBP 15,000. 2. Enter the annual interest rate (APR). This is the rate your lender quotes for the loan. If you are comparing offers, use the representative APR shown by each lender. Rates typically range from 3% for the best deals to 30% or more for borrowers with poor credit. 3. Set the loan term in months. Personal loans are commonly available for 12 to 84 months (1 to 7 years). Shorter terms mean higher monthly payments but less total interest. Longer terms reduce monthly payments but increase the overall cost. 4. Review the results. The calculator shows your fixed monthly payment, the total amount repayable, and the total interest charged. Use these figures to compare different loan offers and find the most affordable option for your budget.

How It Works

Personal loan monthly payments are calculated using the standard annuity formula. This ensures each monthly payment is equal and covers both interest and principal repayment over the loan term. The formula is: Monthly Payment = P x r(1+r)^n / ((1+r)^n - 1), where P is the loan amount, r is the monthly interest rate (annual rate divided by 12 and by 100), and n is the total number of monthly payments. For example, with a GBP 10,000 loan at 7% APR over 36 months: the monthly rate is 7/12/100 = 0.005833. The monthly payment is 10,000 x 0.005833 x (1.005833)^36 / ((1.005833)^36 - 1) = approximately GBP 308.77. The total repayable is GBP 308.77 x 36 = GBP 11,115.72, and the total interest is GBP 1,115.72. If the interest rate is 0%, the calculation simplifies to dividing the loan amount equally across the number of months.

Worked Examples

Example 1: GBP 10,000 loan at 7% APR over 3 years

Inputs: Loan amount: GBP 10,000, APR: 7%, Term: 36 months

Monthly interest rate: 7% / 12 = 0.5833%
Monthly payment: GBP 10,000 x 0.005833 x 1.005833^36 / (1.005833^36 - 1)
Monthly payment: approximately GBP 308.77
Total repayable: GBP 308.77 x 36 = GBP 11,115.72
Total interest: GBP 11,115.72 - GBP 10,000 = GBP 1,115.72

Result: Monthly payment: GBP 308.77, Total interest: GBP 1,115.72

Example 2: GBP 25,000 loan at 4.5% APR over 5 years

Inputs: Loan amount: GBP 25,000, APR: 4.5%, Term: 60 months

Monthly interest rate: 4.5% / 12 = 0.375%
Monthly payment: GBP 25,000 x 0.00375 x 1.00375^60 / (1.00375^60 - 1)
Monthly payment: approximately GBP 466.08
Total repayable: GBP 466.08 x 60 = GBP 27,964.80
Total interest: GBP 27,964.80 - GBP 25,000 = GBP 2,964.80

Result: Monthly payment: GBP 466.08, Total interest: GBP 2,964.80

Example 3: GBP 5,000 loan at 12% APR over 2 years

Inputs: Loan amount: GBP 5,000, APR: 12%, Term: 24 months

Monthly interest rate: 12% / 12 = 1%
Monthly payment: GBP 5,000 x 0.01 x 1.01^24 / (1.01^24 - 1)
Monthly payment: approximately GBP 235.37
Total repayable: GBP 235.37 x 24 = GBP 5,648.88
Total interest: GBP 5,648.88 - GBP 5,000 = GBP 648.88

Result: Monthly payment: GBP 235.37, Total interest: GBP 648.88

Before applying for a personal loan, check your credit report with all three UK credit reference agencies (Experian, Equifax, and TransUnion). Many lenders offer soft-search eligibility checks that show your likelihood of approval without affecting your credit score. When comparing loans, always use the APR rather than the headline interest rate, as the APR includes compulsory fees. Be wary of optional extras such as payment protection insurance (PPI), which adds to the cost. Under UK regulations, you have a 14-day cooling-off period after signing a credit agreement, during which you can cancel without penalty. If you need to borrow less than GBP 7,500, consider alternatives such as a 0% purchase credit card for planned spending, or a credit union loan, which often offers fairer rates for smaller amounts. For larger borrowing, a secured loan or remortgage may offer lower rates, though these put your property at risk.