Thinking about taking out a loan? It’s worthwhile knowing roughly how much your monthly payments will be and what the loan will cost you in interest to see if you can afford it.
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- Understand chance of approval before applying
See loans available to you
- Find loans without harming your credit score
- Understand chance of approval before applying
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What do I need this loan affordability calculator for?
If you’re thinking about getting a personal loan, you’ll want to be sure that you can afford to pay it back on top of your other regular expenses.
Our calculator can help you work out what your monthly repayments could be, based on what you want to borrow. You’ll also be able to see how the repayments could vary if you opt for, say, a three-year loan instead of a one-year loan.
You can use our loan repayment calculator to quickly play around with different options, whether that’s extending or shortening the loan length, or adjusting the interest rate based on what you think your credit rating is. It means you can see if a loan fits your budget and stress-test your ability to repay it.
How does the loan calculator work?
The calculator works out either how much you’ll have to pay a each month or how much you can borrow, based on different variables. These include:
- amount borrowed
- interest rate
- length of the loan
- monthly payments.
If you change any of the variables, the calculator will work it out all over again with the new figures.
The personal loan calculator will give you an approximate guide to what someone with a particular credit rating will get. However, when you apply for a loan, this will be based entirely on your particular circumstances, personal credit rating and the criteria of the loan provider – so may vary a little from the rough guide the calculator provides.
How to use the loan calculator
To see how much your monthly repayments will be:
- Make sure you’re on the ‘What are my repayments?’ tab.
- Enter the amount you want to borrow and for how long – you can either fill in the box or use the slider.
- Select how many years you want to pay back over.
- The average APR is shown but this can be adjusted accordingly, based on whether you have a good or bad credit rating. If you know you’ve got a poor credit score, you’re more likely to be offered a higher APR.
- Check your the result – you’ll be able to see how much your monthly repayments will be and how much you’ll pay overall in interest.
- If you want to, you can then see what the difference is if you pay back over a longer or shorter time, or if you’re offered a higher interest rate.
To see how much you can borrow:
- Select the ‘What can I borrow?’ tab.
- Enter the amount you can afford to repay every month.
- Choose the number of years you want to pay back over.
- If you know the Representative APR of a loan you’re interested in, enter it. The average APR is shown but this can be adjusted accordingly, based on whether you have a good or bad credit rating. If you know you’ve got a poor credit score, you’re more likely to be offered a higher APR.
- Check your the result – you’ll be able to see how much you can borrow with an indication of what you’d pay in interest.
- If you want to, you can try experimenting with some of the variables, to see what happens to the total if you pay back for a shorter or longer period, for example.
In either case, you can then check to see how likely you are to be accepted for this sort of loan. Simply select the ‘Check your eligibility’ button, enter a few personal details and you’ll be able to see loans that you’re likely to be accepted for without having an impact on your credit score.
Once you’ve seen the loans you’re likely to be eligible for, you can then apply for one.
You should think carefully about whether you can afford to pay back a loan regularly and on time before you take one out.
How are loan repayments calculated?
Using the amount borrowed and the APR, the interest calculator does the sums and works out what the interest will add up to over the term of the loan. It also works out how much you’d have to pay back every month to pay off the loan in full.
What should I look for when comparing loans?
When looking for a loan, ideally you want the one with the lowest interest rate so you’re not paying more than you need to. Some loans may also charge an arrangement or set-up fee, which could add to the cost of borrowing too.
Also check whether there’s a penalty for paying back the loan early or making overpayments.
What’s the difference between the loan calculator and the loan eligibility checker?
The loan calculator will give you a rough idea of what you’d need to pay back each month for a loan of a particular amount, based on a specific rate of interest - APR. It won’t point you to particular loans.
The loan eligibility checker is more personalised, going a little more deeply into your circumstances to give you an idea of which loans you’re likely to be accepted for, and at what rate of interest. While this will run a check on your credit history, it won't affect your credit rating and lenders can’t see your historic searches, they can only see applications. Using it to find loans won’t affect your credit rating.
The two can work helpfully together. The calculator can be a good starting point, giving you a guide to what your monthly payments could be. But the financial climate means that lenders will weigh up very carefully how likely you are to repay your loan. This is where the eligibility checker can help. It will give you an indication of which loans you’re likely to be approved for.
You can use the eligibility checker in tandem with the calculator – and adjust the calculator based on the results in eligibility checker to evaluate the impact of different options.
Frequently asked questions
What is APR?
The annual percentage rate – or APR – is the total cost of borrowing money over the course of a year. It’s shown as a percentage of the amount borrowed. As well as the cost of the interest rate, any fees that are automatically added to the loan, for example, such as arrangement fees, are also included in the figure.
Knowing what the APR is can help you compare the costs of taking out a personal loan or credit card. Lenders must tell you about the representative or typical APR when they advertise a loan. Where the term ‘representative APR’ is used, this advertised rate must be offered to at least 51% of successful applicants. If you’ve been pre-approved, some providers will confirm your eligibility for the advertised rate, subject to final lender checks.
But while the APR is good for making comparisons, it’s essential you look at all aspects of a loan before signing up.
Can I save by switching loans?
It depends. Many loans have a penalty for paying them off early. So you’d need to be sure that your new loan would save you more than any penalty you’d need to pay.
If you want to reduce your monthly payments, you could opt for a loan with a longer term. You’ll pay less every month, which could be more affordable in the short term, but you may pay more overall.
If you have more than one debt, you might want to consider a debt consolidation loan. This type of loan lets you turn multiple debt payments – credit cards, store cards, overdrafts or loans – into one outgoing payment. It could be an option worth considering if you can find one with a lower interest rate than that on you existing debts, as it could reduce the total interest you’re paying on what you’ve borrowed.
How can I apply for a loan?
Applying for a loan is straightforward. You just have to supply details about yourself and your finances.
But every loan application you make could have an impact on your credit record, although this depends on the bureau used to conduct the search. A hard search by TransUnion, for example, won’t impact your main, consumer-facing score – which will only be impacted if an account is taken out.
And it’s not a good idea to apply for several loans at the same time. Lenders may think that you’re desperate for money and this may might make them wary of lending to you.
Instead, it’s worth using a loan eligibility checker that evaluates to find out which loans you’re likely to be offered accepted for, and then apply for one you know you’ll probably get. You can use the eligibility checker to compare interest rates and any other aspects of the loan, like early repayment penalties. This way, the only impact on your credit record will be for the loan you apply for and a very likely to be accepted for.
Just remember to make all your loan repayments on time. Even late payments can show up on your credit record.
What type of loans are available?
There are several types of loan, but the main difference is between secured and unsecured loans. With a secured loan, you use an asset like your car or home as collateral. This means that if you don’t pay your loan back, the lender can take possession of your car or home and sell it to get their money back. Here are some of the different types of loan.
Unsecured personal loan
With this type of loan, you don’t need to put up an asset - such as a your house or car - as security for the loan. You can use a personal loan for anything you want, like renovating your home, or paying for an expensive repair or replacement of something like a replacement central heating boiler.
These are guaranteed against one of your valuable assetssomething valuable that you own, which acts as your collateral. If you’re looking to borrow a larger amount of money, you may be asked to offer this kind of security. Remember, your home or your car will be at risk if you don’t keep up your payments.
Are for the purpose of buying a car and could come either as secured or unsecured. You could get a type of personal loan from a bank or lender, or car finance offered by dealerships and online brokers, which comes in a variety of forms.
With this type of loan, a relative or friend promises to pay back the loan if you can’t. They can be useful if you don’t have a credit history or have a poor credit history. You can’t compare this type of loan with Compare the Market.
Bad credit loans
These are specifically aimed at borrowers who have a poor credit history. While bad credit loans can give you a way to rebuild your credit score, the interest rate is generally much higher than usual. And sometimes you’llyou may need a guarantor before a lender will approve you for a loan.
Allow you to borrow money from other individuals, rather than through a bank or building society. Peer to peer loaning is a service that’s regulated by the Financial Conduct Authority (FCA), and so should not be confused with loan sharks). You can’t compare this type of loan with Compare the Market. We don’t compare this type of loan.
Debt consolidation loans
These allow you to put together different types of debts with multiple lenders by consolidating them debts into one loan and one monthly payment. Just be aware
This type of loan can potentially lower your monthly repayments providing credit at a lower interest rate than you’re paying today, or by spreading the debt over a longer period, but this could mean that you will likely pay more interest overall. It’s also worth taking into account that any potential savings might be cancelled out by additional fees and charges required to set up the loan or settle existing loans.
Compare the Market Limited acts as a credit broker, not a lender. To apply, you must be a UK resident and aged 18 or over. Credit is subject to status and eligibility.