About this calculator
Thinking of borrowing? Enter the amount, the annual interest rate and the term in years and this calculator gives the monthly payment, the total you will repay and how much of it is interest.
It assumes a standard repayment loan: equal monthly payments, interest added each month on what you still owe. Loans, car finance and mortgages on a repayment basis work this way.
Worked examples
Real numbers, worked out by the same calculator. Press “Use these numbers” to try one above.
£10,000 at 5% over 5 years
- Monthly payment
- £188.71
- Total you pay back
- £11,322.74
- Total interest
- £1,322.74
- Number of payments
- 60
Borrowing £10,000.00 at 5% over 5 years costs £188.71 a month, £1,322.74 in interest in total. This assumes a standard repayment loan with interest added monthly.
Show the working
- Monthly rate i = 5% ÷ 12 = 0.416667% and n = 60 payments.
- Payment = P × i ÷ (1 − (1 + i)^−n) = £10,000.00 × 0.004167 ÷ (1 − (1 + 0.004167)^−60) = £188.71.
- Total repaid = payment × n = £188.71 × 60 = £11,322.74, so the interest is £1,322.74.
£200,000 at 4% over 25 years
- Monthly payment
- £1,055.67
- Total you pay back
- £316,702.10
- Total interest
- £116,702.10
- Number of payments
- 300
Borrowing £200,000.00 at 4% over 25 years costs £1,055.67 a month, £116,702.10 in interest in total. This assumes a standard repayment loan with interest added monthly.
Show the working
- Monthly rate i = 4% ÷ 12 = 0.333333% and n = 300 payments.
- Payment = P × i ÷ (1 − (1 + i)^−n) = £200,000.00 × 0.003333 ÷ (1 − (1 + 0.003333)^−300) = £1,055.67.
- Total repaid = payment × n = £1,055.67 × 300 = £316,702.10, so the interest is £116,702.10.
£1,200 interest-free over 1 year
- Monthly payment
- £100.00
- Total you pay back
- £1,200.00
- Total interest
- £0.00
- Number of payments
- 12
Borrowing £1,200.00 at 0% over 1 years costs £100.00 a month, £0.00 in interest in total. This assumes a standard repayment loan with interest added monthly.
Show the working
- No interest, so each payment is £1,200.00 ÷ 12 = £100.00.
£25,000 car at 7.9% over 4 years
- Monthly payment
- £609.15
- Total you pay back
- £29,239.21
- Total interest
- £4,239.21
- Number of payments
- 48
Borrowing £25,000.00 at 7.9% over 4 years costs £609.15 a month, £4,239.21 in interest in total. This assumes a standard repayment loan with interest added monthly.
Show the working
- Monthly rate i = 7.9% ÷ 12 = 0.658333% and n = 48 payments.
- Payment = P × i ÷ (1 − (1 + i)^−n) = £25,000.00 × 0.006583 ÷ (1 − (1 + 0.006583)^−48) = £609.15.
- Total repaid = payment × n = £609.15 × 48 = £29,239.21, so the interest is £4,239.21.
The formula
Monthly payment = P × i ÷ (1 − (1 + i)−n), where P is the amount borrowed, i is the monthly interest rate (annual rate ÷ 12) and n is the number of monthly payments. With 0% interest it is simply P ÷ n.
How the interest builds
Early payments are mostly interest and later ones mostly repayment of what you borrowed. That is why paying off a loan early saves more than the same amount saved in the later years. A longer term lowers the monthly payment but raises the total interest, often by a lot.
Rate versus APR
Lenders quote a representative APR that includes some fees. This calculator uses a plain interest rate, so if you enter the APR the answer is a close estimate, not the lender's exact figure. Check your loan agreement for the real numbers.
Frequently asked questions
How is the monthly loan payment calculated?
With the standard annuity formula shown above, using the monthly rate and the number of payments.
Does it work for a mortgage?
For a repayment (capital and interest) mortgage with a fixed rate, yes. Interest-only mortgages and rate changes are not covered.
What happens if I overpay?
You pay less interest and finish sooner. This calculator shows the standard schedule without overpayments.
Is the answer financial advice?
No. It is an estimate for planning. Your lender's figures are the ones that count.
Why is the total interest so high on long loans?
Interest is charged on the balance each month, and on a long loan the balance stays high for years.
Formulas tested against hand-worked answers. Last reviewed 29 September 2026. These calculators do arithmetic only; they are not financial, tax or legal advice.