Loan Calculator UK - Estimate Monthly Payments in the UK

Currency

Loan Amount (GBP)

Interest Rate (%)

Loan Term (months)

Monthly Payment

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Total Payment

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Total Interest

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How Loans Work in the UK

In the United Kingdom, most consumer loans—personal, car finance, and mortgages—use a fixed interest rate and equal monthly payments. The amount you pay each month depends on the principal (amount borrowed), the annual percentage rate (APR), and the term in months. Lenders typically quote rates as an APR and apply interest monthly. LoanWise uses the standard amortization formula used by UK banks and building societies.

Typical Interest Rates in the UK

Rates vary by product, borrower credit, and market conditions. As of recent years, personal loans in the UK often range from about 5% to 30% APR for qualified borrowers; car finance may run 6%–15%; and mortgages often fall between 4% and 7% for fixed-rate deals. Your actual rate depends on your credit score, income, and the lender. Use this calculator to see how different rates affect your monthly payment.

Frequently Asked Questions

What is a good interest rate in the UK?

It depends on the loan type and your credit. For personal loans, rates below 10% APR are generally considered good for borrowers with strong credit. Car finance and mortgage rates are often lower. Shop around and compare offers from multiple lenders.

How long are typical UK loans?

Personal loans in the UK often run 12–84 months; car loans 24–60 months; and mortgages 10–30 years (120–360 months). Shorter terms usually mean lower total interest but higher monthly payments.

Do UK banks calculate interest monthly?

Yes. Most UK consumer loans use monthly compounding: interest is applied each month on the remaining balance. This calculator uses that standard approach, so the results match what you'd see from a typical UK lender.