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Loan Payment Calculator

Estimate monthly loan payments, total repayment and interest using loan amount, rate and term.

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Use the loan payment calculator

Estimate monthly loan payments from loan amount, rate and term.

Result: waiting for input

Enter your values to see the result.

Quick Guide

Quick answer

Loan Payment Calculator: A loan payment calculation spreads the borrowed amount and interest over the repayment term. The monthly payment depends mainly on principal, annual rate and number of payments.

Formula / core ruleMonthly payment = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is loan amount, r is monthly interest rate and n is number of monthly payments.

This is the main calculation rule used by the tool.

Worked exampleA £10,000 loan over 5 years at 6% APR has an estimated monthly payment of about £193.33 before fees or lender-specific charges.

Use the example to check whether your own inputs are in the right range.

Common mistakeDo not compare loans by monthly payment only. A longer term can lower the monthly payment while increasing total interest.

This is the most common reason the result can look wrong.

How to interpret the result

The monthly payment shows affordability, while total interest shows the cost of borrowing. Both matter when comparing offers.

Methodology

The calculator uses the standard amortising loan formula for fixed payments. It assumes the rate and payment schedule stay constant unless the page provides extra options.

Important decisions should be checked against payslips, lender documents, tax guidance, official policy or professional advice where relevant.

Reviewed by CalcBeacon Editorial TeamUpdated June 2026Category: Finance CalculatorsFormula, example and assumptions shown
Practical Guide

How to use this result well

Use this loan payment calculator to estimate monthly repayments from loan amount, interest rate and term before comparing borrowing options.

What the result means

The monthly payment shows affordability, while total interest shows the cost of borrowing. Both matter when comparing offers.

Common mistakes to avoid

  • Choosing the lowest monthly payment without checking total repayment
  • Ignoring arrangement fees, early repayment charges or insurance add-ons
  • Mixing APR, monthly rate and flat rate

When to double-check

Double-check the result when money, employment rights, borrowing, tax, health or official paperwork depends on the number. CalcBeacon is designed to make the maths clearer, not to replace professional judgement.

Frequently asked questions

Why does a longer loan cost more?

A longer term gives interest more time to accumulate, even if the monthly payment is lower.

What is the difference between principal and interest?

Principal is the amount borrowed. Interest is the cost charged for borrowing that money.

Is this an exact lender quote?

No. It is an estimate. Lenders may include fees, eligibility rules and rate changes.

How it works

Formula

Monthly payment = P×r / (1 − (1+r)^−n)

Example

A larger rate or shorter term raises the monthly payment.

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