How to use the loan calculator
- Enter how much you want to borrow.
- Type the yearly interest rate from your loan offer. Use the fixed rate, not the APR, if the offer lists both.
- Enter the length of the loan in years or months.
- Your monthly payment, total interest and total cost appear right away. Open the schedule to see how the balance goes down each year.
Example
Borrowing 20,000 at 7.5% a year over 5 years gives a monthly payment of about 400.76. Over the full term you pay about 24,046, which means roughly 4,046 in interest. Stretch the same loan to 7 years and the payment drops to about 307, but the interest rises to around 5,770. Lower payments almost always mean paying more in total.
Ways to pay less interest
- Shorten the term if you can afford a higher payment. Try changing the years above to see the difference.
- Make overpayments. Even a small extra amount each month goes straight to the balance and cuts interest. Check your loan has no early repayment fee first.
- Improve your credit score before applying. A lower rate saves more than almost anything else.
- Compare offers using the total cost, not just the monthly figure.
This calculator is for planning only and assumes a fixed rate and equal monthly payments. Your lender's figures may differ slightly because of fees, payment dates and rounding.