Work out monthly repayments, total interest and how much extra payments save you — for any UK personal loan.
Add extra months on top of full years
Overpayments reduce interest and term
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Monthly payment
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Total interest
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Total repaid
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Months to repay
Year
Balance
Interest paid
Principal paid
How UK Personal Loan Repayments Work
UK personal loans use amortising repayments — each monthly payment is split between interest (charged on the outstanding balance) and principal (the amount you borrowed). In the early months, more of each payment goes to interest; as the balance falls, more goes to principal.
The repayment formula
Monthly payment = P × r × (1+r)n ÷ ((1+r)n − 1), where P is the loan amount, r is the monthly rate (APR ÷ 12 ÷ 100), and n is the total number of monthly payments.
What is representative APR?
By FCA rules, lenders must advertise a representative APR that at least 51% of accepted applicants receive. Your actual rate may be higher based on your credit profile. Always compare the total amount repayable, not just the monthly figure.
Under £3,000: 15%–30%+ (higher risk, smaller amounts)
Credit union loans: Often lower rates, up to 3% per month (42.6% APR cap by law)
Overpayments: the biggest lever
Many UK personal loans allow overpayments. Even modest extra payments dramatically reduce total interest because they reduce the outstanding balance on which future interest is calculated. Always check your loan agreement for early repayment charges.
Worked Examples
Emma — Home improvement
Loan amount£8,000
APR6.9%
Term3 years
Monthly payment£246.65
Total interest£879.44
Total repaid£8,879.44
James — Debt consolidation
Loan amount£15,000
APR9.9%
Term5 years
Monthly payment£317.97
Total interest£4,078.09
Total repaid£19,078.09
Priya — Overpayment saving
Loan amount£5,000
APR19.9%
Base payment£185.56/mo
+£50 extra/mo£235.56/mo
Interest saved£466.04
Months saved9 months
Frequently Asked Questions
Your monthly repayment is calculated using the standard amortisation formula: PMT = P × r × (1+r)^n ÷ ((1+r)^n − 1), where P is the loan amount, r is the monthly interest rate (APR ÷ 12 ÷ 100), and n is the number of monthly repayments. Each month, a smaller portion goes to interest and a larger portion reduces the principal balance.
Representative APR is the rate that at least 51% of successful applicants receive. Your actual rate may be higher depending on your credit score, income, existing debts and the lender's criteria. If you have a thin credit file or county court judgements (CCJs), you may be offered a higher rate or declined. Always use an eligibility checker before applying to avoid hard searches that temporarily affect your credit score.
Yes — significantly. Even a small overpayment each month reduces your outstanding principal faster, meaning less interest accumulates on a smaller balance. On a £5,000 loan at 19.9% APR over 3 years, paying an extra £50 per month saves £466 in interest and clears the loan 9 months earlier. Always check your lender's terms for early repayment charges (ERCs) before overpaying.
Yes. UK lenders are required to allow you to settle a personal loan early. Under the Consumer Credit Act, you can request an early settlement figure at any time. Most lenders will charge up to 58 days' interest as an early repayment charge (ERC). Compare the ERC against your remaining interest to see if early settlement is worthwhile.
For larger amounts (£3,000+) or longer repayment periods, a personal loan usually offers a lower interest rate and a fixed repayment schedule that clears the debt by a known date. Credit cards are better for short-term borrowing, especially if you can use a 0% purchase or balance-transfer deal and repay within the promotional period. For amounts under £1,000, a 0% credit card is often cheaper than a personal loan.