Loan Calculator

A personal loan looks simple on the advert: a tidy monthly payment, a fixed rate, a fixed end date. The reality is messier. The headline APR you see is rarely the rate you get, the monthly payment hides how much you actually hand over in interest, and the "best" loan on a comparison table is often beaten by a 0% credit card you didn't think to check. Our personal loan calculator cuts through all of that. Put in the amount, APR and term and you get the monthly payment, the total interest, and a month-by-month amortisation schedule that shows where every pound goes.

This guide explains what the calculator does, how UK personal loan pricing actually works in 2026, and the situations where a personal loan is the right answer versus the ones where you'd be cheaper off doing something else.

Contents

• What goes into a UK personal loan
• How to use the calculator
• Worked example: a £10,000 loan at two different rates
• The hidden costs nobody quotes you
• Personal loan vs credit card vs balance transfer vs overdraft
• Frequently asked questions

What goes into a UK personal loan

Four numbers decide everything about a personal loan: the principal, the APR, the term, and the monthly payment that falls out of the other three.

Principal is the amount you borrow. UK personal loans typically run from £1,000 to £25,000, with some lenders going to £50,000 for prime borrowers. Pricing is not linear. Loans under £3,000 are usually charged at 15% to 25% APR. The sweet spot sits between £7,500 and £15,000, where prime borrowers in 2026 can find rates between 6.5% and 9% APR.

APR is the annual percentage rate, which the FCA requires every UK lender to disclose. It rolls together the interest plus any compulsory fees and expresses the total annual cost as one figure. APR is the only number that lets you compare loans fairly, and it comes in two flavours that get confused all the time:

• Representative APR is the rate the lender has to offer at least 51% of accepted applicants. It's what appears in the advert. The other 49% can be quoted a higher personalised rate after the application.
• Personal APR is the rate the lender actually offers you, based on your credit file, income and the size of the loan. It can be the same as the representative rate, or substantially higher.

Term is how long you have to repay. Most personal loans run 1 to 7 years, with some lenders stretching to 10. A longer term means a smaller monthly payment but more total interest, because you're paying interest for more months.

Monthly payment is the output. It's fixed for the life of the loan, which is the main thing a personal loan offers over a credit card: certainty. You know exactly what comes out of your account on the same date every month, and the loan dies on a date you can write in the diary.

How to use the calculator

The loan calculator has three tabs.

Repayment. Enter the loan amount, the APR, and the term in months or years. The calculator returns the monthly payment, the total repayment over the life of the loan, the total interest, and a collapsible amortisation schedule that shows the principal and interest split for every single month. The schedule is the most useful part because it makes obvious what no advert ever shows: early in a loan, most of your payment is interest, not principal. By month 60 of a 7-year loan you've barely dented the balance.

Compare. Side-by-side comparison of two loans on the same principal. Useful when you've been quoted two different APRs and want to see which actually costs less, or when you're weighing a shorter term at a higher monthly payment against a longer term that's cheaper per month but more expensive overall.

Affordability. Works backwards. Enter what you can afford as a monthly payment, the APR you've been quoted, and the term, and it tells you the maximum loan amount that fits the budget. This is the right tab for setting an upper limit before you start shopping rather than letting the lender's affordability check do it for you.

All three tabs sync to the URL, so you can bookmark or share a specific scenario without losing it.

Worked example: a £10,000 loan at two different rates

The headline cost of borrowing in the UK is almost entirely a function of your credit file. To see how much it matters, take a £10,000 loan over 5 years and run it at two realistic 2026 rates.

Prime borrower at 7.9% APR. A clean credit file, an 800+ credit score, stable income. Monthly payment is about £202. Total repayment is roughly £12,116. Total interest is approximately £2,116 over five years.

Thin-file or near-prime borrower at 14.9% APR. Some missed payments years back, a short credit history, or a high existing utilisation. Same loan, same term. Monthly payment is about £237. Total repayment is roughly £14,213. Total interest is approximately £4,213.

Same £10,000 in hand. Same five years. The interest difference is £2,097. That's the real-world cost of having a thinner credit file, and it's the strongest argument in UK personal finance for taking your credit score seriously before you need to borrow. Six months of clean payments and a paid-down credit card balance can move a score enough to drop you into a cheaper APR band.

The Compare tab lets you run this scenario directly. Drop £10,000 in, set Loan A to 7.9% APR over 60 months and Loan B to 14.9% APR over 60 months, and the difference shows up in pounds rather than abstract percentages. If you want to know what to do about it, our UK credit score guide covers the boring stuff that actually moves the needle.

The hidden costs nobody quotes you

The APR is supposed to capture every compulsory cost of borrowing, and broadly it does. But there are still a few line items that don't show up in the advert.

Early repayment fees. The Consumer Credit Act 1974 limits what UK lenders can charge for paying a personal loan off early. In practice many mainstream lenders charge nothing for overpayments, and where a fee applies it is generally modest - check your specific agreement for the exact figure. This is one of the more consumer-friendly corners of UK credit, so if your budget allows, paying down sooner can reduce the total interest you pay.

Late payment fees. Missing a payment usually triggers a flat fee from the lender (the exact amount is set out in your credit agreement), plus a missed-payment marker on your credit file that can stay for six years. The marker is usually the expensive bit, not the fee itself, because it can push you out of the cheaper APR bands on your next loan application.

Credit-life and payment protection insurance. After the PPI mis-selling chapter, the FCA tightened the rules on how protection products are sold alongside loans, but lender-offered cover - sometimes branded as "loan protection" or "income protection" - is still available, often as a tickbox at application. Read the policy document carefully before adding it. Compare the cost and cover against standalone income protection or critical illness cover, because the eligibility conditions and exclusions on lender-sold policies can be narrower than the marketing suggests. This is not a recommendation either way - it's a prompt to read the small print.

Arrangement fees. Some lenders charge a one-off fee at the start that's rolled into the loan and accrues interest along with the principal. These are uncommon for mainstream unsecured loans but do show up on guarantor loans and bad-credit products. Check the total amount payable, not just the APR, when these are in play.

Personal loan vs credit card vs balance transfer vs overdraft

A personal loan is one of four ways the UK consumer credit market lets you borrow. None of them is universally best.

Personal loan. Right for fixed, planned spending where you know the total cost upfront. Home improvements, a wedding, a car, consolidating multiple debts into one payment. The fixed term and fixed rate are the point: certainty over what you'll pay and when you'll be done.

0% purchase credit card. Better than a personal loan for any spending that fits inside the promo period (typically 12 to 24 months in 2026) and that you can realistically clear before the post-promo rate kicks in. Effectively free borrowing if you have the discipline. Useless and expensive if you don't, because the post-promo rate is usually 22% to 28%.

0% balance transfer card. The right answer for existing credit card debt. Move the balance to a 0% transfer card (typically with a 2% to 4% transfer fee in 2026) and clear it before the promo ends. A personal loan to consolidate credit card debt almost always loses to a balance transfer if the math works on the promo window. Our clear UK credit card debt guide walks through the playbook.

Overdraft. Since the FCA's 2020 single-rate rule, arranged overdraft EARs at most major UK banks sit in the high-30s to mid-40s percent range - check your bank's current published rate. That makes overdrafts one of the most expensive ways to borrow for anything more than a few days. They can suit short slippage at the end of the month; longer carry usually belongs on a cheaper product.

The Bank of England publishes monthly effective interest rate data on UK consumer credit, and the averages there tend to be well above the rates a prime borrower would pay on a sweet-spot personal loan because they include credit cards and overdrafts. If your personalised quote on an unsecured loan is materially above the latest BoE effective rate for personal loans (published on the BoE's "Money and Credit" pages), it's worth shopping the alternatives before signing.

For multiple existing debts, the debt payoff calculator compares snowball, avalanche, proportional and consolidation strategies side by side. If a personal loan is part of a wider household budget rather than a one-off, the mortgage calculator and the UK debt help guide round out the picture.

Frequently asked questions

What credit score do I need for the cheapest loan rate?

There's no single UK credit score because the agencies use different scales: Experian goes to 999, Equifax to 1,000, TransUnion to 710. Each lender weights credit-file factors differently and publishes its own eligibility criteria - the agencies' published score bands (and lender comparison sites that use them) are the most accurate guide for your file. Generally, the lowest advertised personal-loan APRs tend to be offered to applicants in the agencies' top score bands. The factors that consistently appear in agency guidance are credit utilisation under 30%, no missed payments in the last 12 months, and being on the electoral register at your current address.

Can I overpay a personal loan early?

Yes, and where the budget allows it, overpaying can reduce the total interest you pay. Under the Consumer Credit Act 1974, UK lenders' early-repayment charges on regulated agreements are capped, and many mainstream lenders waive any charge on overpayments - check your specific credit agreement for the figure that applies to you. You can request an early settlement figure from your lender at any time without committing to settle. The savings on a 5-year loan from clearing it early can be meaningful because the front-loaded interest schedule means each month you skip saves the interest that would have accrued on that month.

Does taking a personal loan hurt my mortgage application?

It can, in two ways. First, the loan application itself involves a hard credit search, and several hard searches in a short window before a mortgage application can drop your score. Soft-search eligibility checkers (offered by sites such as MoneySavingExpert, ClearScore and Experian) let you check likely acceptance without a hard search. Second, the monthly payment counts against affordability on the mortgage application - the exact reduction in maximum mortgage varies by lender and income, but a recurring loan commitment of a few hundred pounds a month can meaningfully reduce the amount a mortgage lender will offer. If a mortgage is on the horizon in the next 6 to 12 months, factor that into the timing of any new loan and consider talking to a mortgage broker first.

What's the difference between APR and the interest rate?

The interest rate is the cost of the borrowed money. The APR rolls in any compulsory fees and expresses the total annual cost as a single figure. For most mainstream UK personal loans the two numbers are very close because there are no upfront fees, but for guarantor loans or loans with arrangement fees the APR can be meaningfully higher than the headline interest rate. Always compare APRs, not interest rates, and always use the personalised APR rather than the representative APR in the advert.

Is a longer loan term cheaper or more expensive?

Cheaper per month, more expensive overall. A £10,000 loan at 7% APR costs about £198 a month over 5 years and £2,116 in total interest. The same loan over 7 years drops to about £151 a month but costs roughly £2,690 in interest. Stretching the term to make the monthly payment fit is fine if it's the difference between affording it and not, but if you can stomach the higher monthly payment, the shorter term wins every time on total cost.

Should I consolidate credit card debt with a personal loan?

Usually only if you can't get a 0% balance transfer card. The maths is almost always: 0% balance transfer card (with a 2% to 4% transfer fee) beats personal loan at 8% to 12% beats keeping the balance on a 22% to 28% credit card. Run both options against your actual figures in the debt payoff calculator before committing. If your credit file won't qualify for a balance transfer at all, a personal loan consolidation is still meaningfully cheaper than carrying credit card debt at the standard rate.