Working out the true cost of a loan
Whether it is a car, a personal loan, or debt consolidation, the advertised monthly repayment rarely tells the whole story. This calculator reveals the monthly repayment, the total you will repay over the life of the loan, and the total interest — the extra you pay for the privilege of borrowing.
How to use the loan calculator
Enter the loan amount, the annual interest rate, and the term in years. Personal and car loans typically run over one to seven years. Shortening the term raises the monthly payment but cuts the total interest sharply, so it is worth testing a few combinations.
How the numbers work
Loans use the same amortisation formula as a mortgage: M = P · r(1+r)n / [(1+r)n − 1]. Each payment covers the interest accrued that month first, and whatever remains reduces the balance. Because the balance is highest at the start, early payments are interest-heavy.
Compare the APR, not the headline rate
Two loans with the same interest rate can cost very different amounts once fees are included, which is why the APR (annual percentage rate) is the fairer comparison — it folds fees into a single figure. Even a 0.5% difference in rate can save hundreds over a few years. If you can make extra repayments without penalty, doing so early in the term saves the most, because you cut the balance while it is still large.