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Rates & sources
Illustrative fixed-payment loan calculation. It does not model PCP optional final payments, hire-purchase fees or a lender’s personalised APR.
| Band / figure | Rate |
|---|---|
| Payment model | fixed monthly |
| APR assumption | entered by you |
| PCP balloon payment | not modelled |
Source: FCA — APR and borrowing-cost guidance — check the linked guidance and any live quote before acting.
When to use this calculator
- Before comparing personal loan or credit offers on the same amount and term.
- When you want to see total interest, not only the monthly payment.
- When you are choosing between a shorter term and a lower monthly debit.
- When you need a planning estimate before making a credit application.
Example: comparing the cost of financing a used car
Use these sample inputs as a quick scenario test, then change one variable at a time to compare outcomes.
| Input | Value |
|---|---|
| Car price | £18,000 |
| Deposit | £3,000 |
| Amount financed | £15,000 |
| APR and term | 7.9% over 4 years |
The monthly figure matters, but the total interest shows the real cost of stretching the agreement. Test a larger deposit and a shorter term before choosing the offer that only looks cheapest each month.
How to read your results
Monthly
The figure produced by this output for the inputs you entered. Change one variable at a time if you want to see what drives it.
Total Cost
The headline outcome of this calculation. It is most useful when read alongside the supporting metrics rather than in isolation.
Interest
The figure produced by this output for the inputs you entered. Change one variable at a time if you want to see what drives it.
Method & assumptionsAuthoritative sources
This calculator works out your monthly repayment, total interest paid, and overall cost of borrowing based on the loan amount, interest rate (APR), and repayment term you enter. It uses the standard amortisation formula, so each monthly payment covers accruing interest first with the remainder reducing the outstanding principal. The APR field should reflect the annual percentage rate quoted in your finance agreement — not the flat rate, which can look artificially low. The calculator does not account for arrangement fees added to the loan or payment protection insurance (PPI) premiums, so add those separately if relevant. Results are illustrative; always verify figures with your lender before signing any agreement.
Common mistakes
- !Judging an offer by the monthly payment alone and ignoring total interest.
- !Using a representative APR as if it were a guaranteed personal rate.
- !Forgetting arrangement fees or early-settlement terms.
- !Comparing two loans that do not use the same amount and term.
What to do next
- Compare the same car with a larger deposit and a shorter term, keeping the APR unchanged.
- Check whether the advertised rate is representative APR and add any compulsory fees to the total cost.
- For PCP, request the optional final payment and mileage or condition terms before comparing the agreement with a fully repaid loan.
Frequently asked
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