Loan Repayment Calculator
Calculate monthly repayments for any loan. Shows total interest paid and full amortisation schedule. Free.
How to use
How loan repayments work
Each monthly payment covers: (1) interest on the outstanding balance, plus (2) some principal repayment. Early payments are mostly interest; later payments are mostly principal. This is amortisation — the same payment structure that banks use for mortgages, car finance, and personal loans.
Reducing total interest paid
Making extra payments reduces the principal faster, meaning less interest accrues on future payments. Even a £100/month extra payment on a £250k mortgage can save £15,000+ in interest and cut 2-3 years off the term. The earlier you overpay, the more you save.
Interest-only vs repayment
This calculator shows a repayment mortgage (capital and interest). Interest-only mortgages have lower monthly payments but the full principal remains due at the end of the term.
The word 'amortisation' comes from Latin 'morte' (death) — you're killing off the debt. On a 25-year mortgage at 5%, you pay more in interest over the life of the loan than you borrowed. In the first year, roughly 80% of each payment is interest; in year 24, it's nearly all principal.
Making even one extra payment per year on a 25-year mortgage cuts about 3 years off the term and saves thousands in interest. The impact is larger early in the mortgage when the outstanding balance (and therefore interest charge) is highest.
Frequently asked questions
How is the monthly loan repayment calculated?
The tool uses the standard amortisation formula based on the loan amount, annual interest rate and term. Each payment covers that month's interest first, with the remainder reducing the balance.
Why is more of my early payment interest?
Interest is charged on the outstanding balance, which is highest at the start. As the balance falls, a larger share of each fixed payment goes to principal.
Does this include fees or variable rates?
No. Results assume a fixed rate and no arrangement fees, so your lender's quoted figures may differ.