Total: 36 months
Extra monthly payment on top of your regular loan repayment.
Loan B
Total: 60 months
Monthly Payment
£154.16
Total Repayable
£5,550
Total Interest
£550
| Year | Principal Paid | Interest Paid | Remaining Balance |
|---|---|---|---|
| 1 | £1,553 | £296 | £3,447 |
| 2 | £1,664 | £186 | £1,782 |
| 3 | £1,782 | £67 | £0 |
Everything you need to know about loan repayments in the UK
How is my monthly repayment calculated?
Your monthly repayment is calculated using the standard amortization formula. This takes your loan amount, annual interest rate (APR), and loan term to determine a fixed monthly payment that covers both interest and principal repayment. In the early months, a larger portion of your payment goes towards interest, while later payments predominantly reduce the principal balance.
What is APR?
APR stands for Annual Percentage Rate. It represents the total yearly cost of borrowing, including the interest rate and any mandatory fees charged by the lender. In the UK, lenders are required to display the APR so you can fairly compare loan offers. A representative APR means at least 51% of successful applicants will receive that rate or better.
How do early repayments save me money?
Making extra payments reduces your outstanding loan balance faster, which means less interest accrues over the remaining term. Even small additional monthly payments can save you a significant amount in total interest and shorten your loan term considerably. For example, paying an extra £50/month on a £10,000 loan at 6.9% could save you hundreds in interest and cut months off your repayment.
Should I make overpayments on my loan?
Generally, overpaying your loan is a good idea as it reduces both your total interest cost and loan term. However, check your loan agreement first — some lenders charge early repayment fees that could offset any savings. Also consider whether the money would be better used elsewhere, such as paying off higher-interest debts first or building an emergency fund. The avalanche method (paying off the highest interest rate debt first) is typically the most cost-effective debt repayment strategy.
Important: This calculator provides estimates for illustration purposes only. Actual loan terms depend on your credit history, lender criteria, and individual circumstances. For personalised financial advice, consult a qualified financial adviser.
This calculator uses official rates and thresholds from:
Last verified: February 2026 · Tax year 2025/26. Results are indicative — consult a qualified accountant for personalised advice.
Reviewed by M. Samiuddin Quadri, ACCA — Chartered Certified Accountant at Gladstone & Co. · Updated for the 2025/26 tax year.
Disclaimer: This calculator provides estimates based on current HMRC rates and thresholds for the 2025/26 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant or tax adviser before making financial decisions. Read our terms
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