Loan calculator

Compare total repayment, not monthly payment

Lenders advertise low monthlies by stretching the term. £15,000 over 5 years at 7% costs £17,821 in total; over 7 years the monthly drops but the total climbs past £18,900. Always run both offers here and compare the total repayment line, not just the monthly figure — the donut above shows exactly how much of your repayment is interest versus the original amount borrowed.

Worked example: $15,000 at 7.5% over 5 years

Using the amortization formula M = P × r(1+r)ⁿ / ((1+r)ⁿ − 1):

• Monthly rate (r): 7.5% ÷ 12 = 0.625%
• Number of payments (n): 5 × 12 = 60
• Monthly payment (M): $301
• Total repayment: $301 × 60 = $18,034
• Total interest: $18,034 − $15,000 = $3,034

Monthly payment by loan amount and term

Estimated monthly payment at a 7.5% APR — use this to sanity-check an offer at a different loan size or term.

Loan amount	3-year term	5-year term	7-year term
$5,000	$156	$100	$77
$10,000	$311	$200	$153
$15,000	$467	$301	$230
$20,000	$622	$401	$307
$25,000	$778	$501	$383
$30,000	$933	$601	$460

Car loan vs personal loan vs dealer finance

• Dealer/manufacturer finance — often has promotional 0%–3% APR on new cars, but usually requires a larger deposit and can restrict early repayment.
• Bank or credit union personal loan — typically 6%–12% APR depending on credit score, but the car is yours outright and you can shop anywhere.
• Secured vs unsecured — a loan secured against the car (or another asset) usually has a lower rate than an unsecured personal loan, but the lender can repossess the asset if you default.

See our full car loan vs personal loan comparison for a worked example.

How term length changes the total cost

Same $15,000 loan at 7.5%, three different terms:

Term	Monthly payment	Total interest
3 years	$467	$1,797
5 years	$301	$3,034
7 years	$230	$4,326

Stretching from 3 to 7 years cuts the monthly payment by over half, but more than doubles the total interest — for a depreciating asset like a car, a longer term also raises the odds of being "upside down" (owing more than the car is worth) for longer.

What this calculator does not include

• Fees — origination fees, documentation fees or early-repayment charges are not included; check the loan's APR (not just the headline rate) since APR folds most fees in.
• Add-on products — GAP insurance, extended warranties and payment protection insurance bundled into the loan increase the principal and are not modeled here.
• Trade-in or deposit — enter the amount you're actually financing (loan amount), not the vehicle's full price, if you're putting down a deposit or trade-in value.

Tips for a cheaper loan

• Check your credit score first — it drives the APR you're offered more than anything else.
• Shorter term = less total interest, if the monthly fits your budget.
• For cars, compare dealer finance vs a bank personal loan — see our full comparison.
• Avoid add-on insurance products bundled into the loan unless you've compared them against buying separately — they inflate the principal and therefore the interest too.

Frequently asked questions

How is a loan payment calculated?

With the amortization formula M = P × r(1+r)ⁿ / ((1+r)ⁿ − 1) — same math banks use.

What is APR?

The yearly cost including interest and mandatory fees — the best number for comparing offers.

Is a longer term better?

Lower monthly, higher total cost. Compare totals before deciding — a longer term on a depreciating asset like a car also raises the risk of owing more than it's worth for longer.

Why is so much of my early payment interest?

Interest is charged on the outstanding balance, which is highest at the start of the loan — the same reason mortgages front-load interest.

Should I choose dealer finance or a bank loan?

Compare the total repayment on both, not just the monthly. Dealer promotional rates (0–3% APR) can beat a bank loan outright, but only if you qualify — otherwise a bank or credit union personal loan at 6–12% APR is often cheaper once standard dealer rates apply.

What credit score do I need for a good rate?

Lenders vary, but scores above 700 (US) generally unlock the better published rates; below 600, expect meaningfully higher APRs or the need for a secured loan or guarantor.