What does a £5,000 loan at 9.9% over 3 years cost per month?
A £5,000 loan at 9.9% over 3 years costs £161.10 a month. Over the full term you'd pay £800 in interest, for a total of £5,800.
Repayment schedule
| Year | Interest | Principal | Balance |
|---|---|---|---|
| 1 | £427.90 | £1,505.30 | £3,494.70 |
| 2 | £271.93 | £1,661.27 | £1,833.43 |
| 3 | £99.80 | £1,833.43 | £0.00 |
Computed with the standard amortisation formula. The same payment applies in any currency — only the symbol changes.
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Frequently asked questions
How is the monthly loan payment calculated?
Loan repayments use the standard amortisation formula M = P·r(1+r)ⁿ/((1+r)ⁿ−1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments. This gives a fixed monthly payment where early payments are mostly interest, shifting toward principal over time.
What happens if I make overpayments?
Overpayments directly reduce your outstanding balance, which reduces the interest charged in future months. Even small regular overpayments can knock years off the term and save a significant amount in total interest. Use the Loan Repayment Calculator to model exactly how much any overpayment saves.
What is the difference between APR and interest rate?
The interest rate is the basic cost of borrowing expressed as an annual percentage. APR (Annual Percentage Rate) includes the interest rate plus any mandatory fees, giving a truer picture of the total cost. Always compare loans using APR rather than the headline rate.
How much of each payment goes to interest vs. principal?
In the early months, most of your payment covers interest because the outstanding balance is high. As you repay principal, the interest charge falls and more of each payment reduces the balance — the repayment schedule shows how this split changes year by year.