Loan repayment calculator with amortisation schedule
Enter the amount borrowed, the interest rate and the term to get the monthly payment, the total interest you will pay and a full amortisation schedule. The first twelve months are listed row by row so you can see how little of an early payment goes to the balance, followed by a year-by-year summary. The annuity formula behind the payment is shown with your own numbers substituted in.
How to use the Loan Calculator
- Enter the amount you are borrowing and any arrangement fee added to it.
- Enter the annual interest rate and the term in years.
- Choose whether the rate is nominal (divided by twelve) or an effective APR.
- Press Calculate repayments to see the payment, total interest and schedule.
The annuity formula
A level-payment loan is priced with the annuity formula:
M = P × i ÷ (1 − (1 + i)−n)
where P is the amount borrowed, i is the interest rate for one payment period and n is the number of payments. For £15,000 over 5 years at 7.9% nominal, i = 0.079 ÷ 12 = 0.00658333 and n = 60, giving M = 15,000 × 0.00658333 ÷ (1 − 1.00658333−60) = £303.43 a month. Total repaid is £18,205.80, so the interest is £3,205.80.
If the rate is zero the formula collapses and the payment is simply P ÷ n.
Nominal rate or effective APR?
Lenders quote instalment loans in two different ways. A nominal annual rate is divided by twelve to get the monthly rate — this is the convention behind almost every published monthly payment. An effective APR already includes the effect of compounding, so the matching monthly rate is (1 + APR)1/12 − 1, which is slightly lower. At 7.9%, nominal gives a monthly rate of 0.65833% while effective gives 0.63563% — £303.43 a month against £301.48, or about £1.95 a month on a £15,000 five-year loan. Use whichever matches your agreement; the difference grows with the rate.
How an amortisation schedule works
Each month, interest is charged on the outstanding balance, the payment covers that interest first, and whatever is left reduces the balance. Early on, most of the payment is interest; by the end, almost all of it is capital. In the example above, the first payment splits into £98.75 interest and £204.68 capital; the sixtieth splits into £1.98 interest and £301.36 capital.
| Effect | Why it happens |
|---|---|
| Doubling the term does not halve the payment | Interest is charged for twice as long, so the payment falls by less than half and the total interest rises sharply |
| Overpaying early saves the most | Every pound off the balance saves interest for every remaining month |
| The last payment is often a few pence different | Rounding the monthly payment to the nearest penny leaves a small balance to clear |
What this does not include
The figures are the contractual capital-and-interest repayments only. They exclude payment protection insurance, late fees, early-settlement charges and any broker commission, and they assume the rate is fixed for the whole term and that every payment arrives on time. A variable-rate loan will not follow this schedule. Arrangement fees are included only if you add them to the amount borrowed using the field provided; fees paid separately up front change the APR but not the monthly payment.
Frequently asked questions
How is the monthly payment calculated?
With the annuity formula M = P × i ÷ (1 − (1 + i)^−n), where i is the monthly interest rate and n the number of monthly payments. The calculator substitutes your numbers into it and shows the working.
What is the difference between APR and interest rate?
The interest rate prices the borrowing; the APR also folds in compulsory fees and expresses the cost as an effective annual rate. Two loans with the same rate can have different APRs if one charges an arrangement fee.
Why is so much of my early payment interest?
Interest is charged on the outstanding balance, which is at its largest in month one. As the balance falls, the interest share falls and the capital share rises — the schedule shows this month by month.
Does it handle a 0% loan?
Yes. When the rate is zero the payment is simply the amount divided by the number of months, and the total interest is zero.
Privacy
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Last updated 2026-09-23.