Our loan calculator will tell you how much a personal loan will cost you monthly and over time. It helps you understand borrowing costs, compare repayment options and avoid taking on more debt than you can comfortably afford. While it doesn’t replace lender quotes, it gives you a clear starting point before applying for a loan. You can see the best personal loan rates in the UK here.
How the Good Money Guide Loan Calculator Works
The Good Money Guide loan calculator helps you estimate the cost of a personal loan before you apply. It shows how different loan amounts, interest rates and repayment terms affect your monthly repayments and the total interest you’ll pay. This makes it useful for budgeting, comparing borrowing options and checking affordability without impacting your credit score.
Step 1: Enter the Loan Amount
Start by entering the amount you want to borrow. This could be a small loan to cover short-term costs or a larger amount such as £10,000 for a major purchase or consolidation. The figure you enter represents the total amount borrowed before interest is added.
Step 2: Choose the Loan Term
Next, select how long you want to repay the loan. Loan terms are usually measured in years and typically range from one to seven years. Shorter terms mean higher monthly repayments but less interest overall, while longer terms reduce monthly costs but increase the total amount repaid.
Step 3: Add the Interest Rate (APR)
You then enter the interest rate, also known as the APR. This represents the annual cost of borrowing and includes interest and standard fees. The rate you qualify for depends on your credit score and financial circumstances, so it’s best to use a realistic estimate based on current loan offers.
Step 4: Review Your Monthly Repayments
Once your details are entered, the calculator shows your estimated monthly repayment and the total interest payable over the life of the loan. You can adjust the figures to compare scenarios, such as borrowing less, choosing a shorter term, or seeing how much you could save with a lower interest rate.
How Much Is a £10,000 Loan Per Month in the UK?
The monthly cost of a £10,000 loan depends on the interest rate and repayment term. As a rough guide, a £10,000 loan over three years at around 5% APR would cost roughly £300 per month. Spread over five years at around 7% APR, repayments could be closer to £200 per month. The loan calculator gives a more accurate figure based on your inputs.
What Is the Rule of 78 for Personal Loans?
The Rule of 78 is an older method of calculating loan interest that front-loads interest payments. This means a larger proportion of early repayments goes towards interest rather than reducing the loan balance. If you repay the loan early under this method, you may not save as much interest. Most modern UK personal loans now use simpler interest calculations, but it’s still worth checking the loan terms.
How Much Money Can I Borrow Based on My Salary?
There is no fixed amount you can borrow based solely on salary. Lenders assess income, regular outgoings, existing debts and your credit history to determine affordability. In general, lenders want to ensure monthly repayments are manageable after essential expenses. Using the loan calculator helps you test repayment levels before applying.
Is It Better to Use a Credit Card or Get a Loan?
Credit cards are often better for smaller purchases or short-term borrowing, particularly if you can clear the balance during an interest-free period. Personal loans are usually more suitable for larger amounts or planned expenses because they offer fixed repayments, a clear end date and often lower interest rates than carrying a long-term credit card balance.