Find the monthly payment, total interest and total cost of an unsecured personal loan, with the amortisation schedule.
⚖︎ Results are for informational purposes and do not constitute tax advice. For specific situations, consult a licensed accountant or the relevant tax authority.
iHow it is calculated
The fixed monthly payment uses the annuity formula, from the loan amount, the monthly rate (annual ÷ 12) and the number of months:
payment = P × r ÷ [1 − (1 + r)−n]
For a £10,000 loan over 5 years at 7%: the monthly payment is about £198, and the total interest is roughly £1,880.
?Frequently asked questions
How is a personal loan payment calculated?
With the same annuity formula as any loan: from the amount, the monthly rate and the number of months. For example, £10,000 over 5 years at 7% works out at about £198 a month.
What interest rate do personal loans have?
Because a personal loan is unsecured, the rate is higher than on a mortgage — indicatively around 6–10% APR for a £10,000 loan, depending on the lender, the amount, the term and your credit score. The best advertised rates only go to a share of successful applicants.
How much can I borrow with a personal loan?
Amounts typically range from about £1,000 to £25,000 or more, subject to income and an affordability check on your outgoings. A personal loan is unsecured, so it needs no collateral, only proof that you can repay.
What is the difference between a personal loan and a mortgage?
A personal loan is unsecured, with smaller amounts, a shorter term and a higher rate. A mortgage is secured on the property, with large amounts, a long term and a much lower rate.
What do I need to apply for a personal loan?
Usually: photo ID, proof of income or the account your salary is paid into, and your address history. Lenders run a credit check, so the exact terms depend on your score and existing commitments.
Can I repay a personal loan early?
Yes. Under the Consumer Credit Act you can settle early at any time; the lender may charge up to about one to two months' interest as an early settlement fee. Reducing the term saves more interest than reducing the payment for the same amount repaid.
What is APR and why is it higher than the interest rate?
The APR includes, besides interest, any compulsory fees, so it reflects the real yearly cost of the loan. That is why the representative APR is usually higher than a headline interest rate and is the figure to compare on.
How do I reduce the total cost of the loan?
Choose the shortest term you can comfortably afford, compare the representative APR across lenders, avoid unnecessary add-ons, and consider refinancing if a better offer appears.