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.

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.

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.

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.