Personal loan calculator

Our personal loan calculator gives you an estimate of how much a loan would cost you and if it could be an affordable option. Read on to learn more about how a personal loan calculator can help calculate how much you could borrow.

Rhiannon Philps Last updated on 16 August 2022.
Personal loan calculator

What is a personal loan calculator?

A personal loan calculator gives you an estimate of how much a loan would cost and helps you to see whether it would be a realistically affordable option for you. The results are based on the information you input into the different fields.

We offer two free personal loan calculators, which each offer slightly different features. One is a monthly loan repayment calculator that works out what your payments on a loan would be each month, and the other calculator works out the size of loan you could potentially afford. With both calculators, you can see how much you would pay in interest and what the total amount repayable would be.

A loan calculator is intended to give you an indication of the loan amounts available to you – it is not a guarantee that you will be able to borrow that amount. Approval for a loan would depend on your credit score, affordability and other criteria set by the lender.

How does a personal loan calculator work?

With the loan repayment calculator, you can work out what your monthly payments on a loan would be by entering: the total amount you want to borrow, the time you want to borrow it for, and the Annual Percentage Rate (APR). You can alter the information you input to see how it affects your repayments.

The affordability calculator estimates the size of loan you could potentially borrow. You input the amount you can afford to repay each month, the length of your preferred loan term, and the APR, to see how much you could borrow and how much you would need to repay overall, including interest.

The results generated by the calculators assume that the interest rate is fixed for the whole loan term, and that you make regular payments each month.

Why should I use an online loan calculator?

An online loan calculator is a quick, simple, and free way to see at a glance whether a loan is affordable or not. By inputting the amount you want to borrow, or the amount you can afford to repay each month, you can adjust the other variables to see what is realistically achievable for your situation.

Although an online loan calculator can only give you an indication of the size of loan you could afford, and is not a guarantee that you could borrow this amount if you applied for a loan, it means you will be better informed before you decide to apply for a loan.

If you apply for a loan that is too large for you to afford, the lender would reject you which would then harm your credit score.

» MORE: How does a personal loan affect your credit score?

Calculate your loan repayments and what you could afford to borrow

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What is APR?

APR, or Annual Percentage Rate, can help you understand the cost of a loan over the course of one year, taking into account interest rates plus any fees the lender charges. It is designed to make it easier to compare loans and credit options, minimising the chances of getting caught out by loans with low interest rates but expensive hidden fees.

APR does not include extra charges such as any early or late repayment fees.

Lenders must also provide what is known as a representative APR. However, not everyone will necessarily be offered the advertised rate. Representative APR means that 51% of approved loan applicants will have this rate or lower, while the remaining 49% will get a different rate that will often be higher.

» MORE: Guide to APR

What is a personal loan?

A personal loan is a type of loan offered by banks and online lenders. They are not normally secured against any assets, such as your house, so they can sometimes be called unsecured loans.

» MORE: Unsecured loans vs secured loans

You can often apply for and receive a personal loan relatively quickly, and they normally have lower interest rates than other accessible forms of credit such as overdrafts or credit cards. However, rates will vary between lenders and individuals.

What can I use a personal loan for?

You can use a personal loan for a variety of purposes, such as home renovations, a holiday, a large purchase, unexpected expenses like car repairs, or consolidation of other debt, for example.

How much can I borrow with a personal loan?

You can typically borrow more with a personal loan than you can with a credit card or other short-term borrowing options, but not as much as you can with a secured loan. Often, unsecured loans of up to around £25,000 will be available, although some lenders may offer loans greater or smaller than this.

Does the loan term affect the total cost of the loan?

If you choose to repay your loan over a shorter term, your monthly payments will be higher than if you choose to repay it over a longer period. However, because you will repay the loan quicker with a shorter term, you will usually pay less interest making the total cost of the loan smaller.

How does credit score impact loan eligibility?

Your credit score is one of the factors lenders will consider when they decide whether to accept your loan application. As well as determining whether you will get approved for a loan, your credit score can influence how much the loan will cost you as the better your score, the better interest rates you are likely to find.

There are specialist bad credit loans that can help people with poorer credit ratings access funds. As you would expect, these loans are more expensive than standard mainstream products offered to those with a better credit history.

» MORE: Getting a loan with bad credit

How can I apply for a personal loan?

Before applying for a loan, it is a good idea to get your finances in order and to take time preparing your application. A loan calculator can help to indicate what size loan you might qualify for but, to increase your chances of approval and to get the best rates, you need to make sure your credit score and application are as strong as possible.

If you find a suitable loan, fill in your application carefully. Remember that loan applications leave a mark on your credit history, so only apply for a loan you think is a realistic prospect. As part of your application, you will need to undergo a credit score check.

» MORE: Tips for applying for a personal loan

Where can I get a personal loan?

You can get a loan from a bank or online lender. There are many providers to choose from, so, to help you narrow down your options and find a loan suitable for you, you can compare loans on our comparison table.

» COMPARE: Personal loans

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About the author:

Rhiannon is a financial writer for NerdWallet, with a particular interest in personal finance and insurance guides for consumers. Read more

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