Personal Loan Calculator

An unsecured personal loan gives you a lump sum you repay in equal monthly instalments over a set term — typically one to seven years. The cost is driven by the APR (annual percentage rate), which rolls the interest rate and any compulsory fees into one figure so you can compare deals fairly. A larger loan, a higher APR or a longer term all increase the total interest you pay.

Spreading a loan over more years lowers the monthly payment but increases the total interest, because you owe the balance for longer. A £10,000 loan at 8.9% over 3 years costs far less in total than the same loan over 7 years, even though the monthly payment is higher. Borrow over the shortest term you can comfortably afford to minimise the total cost.

The advertised "representative APR" only has to be offered to 51% of accepted applicants — the rest can be charged more. Your personalised rate depends on your credit score, income and existing debts. Use lenders' soft-search eligibility checkers to see your likely rate without leaving a hard footprint on your credit file.

• Check your credit file first: Correct errors and register to vote — small fixes can move you to a better rate band.
• Use soft-search checkers: Compare personalised rates without multiple hard searches denting your score.
• Borrow the right amount: Mid-size loans often have the lowest rates; avoid stretching the term unnecessarily.
• Check early-repayment terms: Most personal loans allow overpayment; the lender can charge up to ~58 days' interest on early settlement.

• Choosing the longest term for a low payment. It minimises the monthly cost but maximises total interest.
• Applying to many lenders at once. Multiple hard searches in a short time can lower your score. Use soft-search tools.
• Ignoring fees. Compare APR (which includes compulsory fees), not just the headline interest rate.
• Borrowing for non-essentials at high APR. For short-term or small sums, a 0% credit card can be cheaper than a loan.