Loan calculator
Loan summary
For a loan of £20,000 at 5.00% interest over 10 years, your monthly payment will be £212. Over the life of the loan, you'll pay a total of £25,456 — meaning you'll fork out £5,456 in interest alone.
Here's how it breaks down: 21.43% of your total payments will go toward interest, while the other 78.57% chips away at the loan itself. That's the part you should care about — how much of your hard-earned cash is covering the cost of borrowing, and how much is actually paying off your loan.
And just to recap, over 120 months (that's 10 years), you're locked into £212 per month. It's always good to know the annual cost too: you'll pay £2,546 each year. But remember, the proportion of your payment that goes to interest will shrink over time as you reduce the loan balance. Early on, a bigger portion of that monthly payment is chipping away at interest than toward the end.
Year-by-year loan payment breakdown
| Year | Payment | Interest | Principal | Remaining Balance |
|---|---|---|---|---|
| 1 | £2,546 | £964 | £1,581 | £18,419 |
| 2 | £2,546 | £883 | £1,662 | £16,756 |
| 3 | £2,546 | £798 | £1,747 | £15,009 |
| 4 | £2,546 | £709 | £1,837 | £13,172 |
| 5 | £2,546 | £615 | £1,931 | £11,241 |
| 6 | £2,546 | £516 | £2,030 | £9,211 |
| 7 | £2,546 | £412 | £2,133 | £7,078 |
| 8 | £2,546 | £303 | £2,243 | £4,835 |
| 9 | £2,546 | £188 | £2,357 | £2,478 |
| 10 | £2,546 | £68 | £2,478 | £0 |
Digging deeper into your loan
Amortisation matters: In the early years, you'll pay a good chunk toward interest. The magic here is amortisation, and it's something every borrower should understand. It's easy to think you're chipping away at the debt when, in reality, the interest is front-loaded.
Interest vs Principal: By the end of the loan term, you'll have paid £5,456 in interest, which is around 21.43% of your total repayment. It's important to realise that with different rates or loan durations, this can change dramatically.
Consider the loan term: Shorter loan terms mean higher monthly payments but save you a lot on interest. For example, paying off this same loan in 9 years instead of 10 years would hike your monthly payment to £230 but cut your total interest to £4,877, meaning you'd pay only about 19.61% of your total payments in interest.
Changing interest rates: If the interest rate were 6.00% instead of 5.00%, you'd end up paying a total of £26,645 over the same 10 years — an extra £1,189 in interest.
Loan calculator
Loan summary
For a loan of £20,000 at 5.00% interest over 10 years, your monthly payment will be £212. Over the life of the loan, you'll pay a total of £25,456 — meaning you'll fork out £5,456 in interest alone.
Here's how it breaks down: 21.43% of your total payments will go toward interest, while the other 78.57% chips away at the loan itself. That's the part you should care about — how much of your hard-earned cash is covering the cost of borrowing, and how much is actually paying off your loan.
And just to recap, over 120 months (that's 10 years), you're locked into £212 per month. It's always good to know the annual cost too: you'll pay £2,546 each year. But remember, the proportion of your payment that goes to interest will shrink over time as you reduce the loan balance. Early on, a bigger portion of that monthly payment is chipping away at interest than toward the end.
Year-by-year loan payment breakdown
| Year | Payment | Interest | Principal | Remaining Balance |
|---|---|---|---|---|
| 1 | £2,546 | £964 | £1,581 | £18,419 |
| 2 | £2,546 | £883 | £1,662 | £16,756 |
| 3 | £2,546 | £798 | £1,747 | £15,009 |
| 4 | £2,546 | £709 | £1,837 | £13,172 |
| 5 | £2,546 | £615 | £1,931 | £11,241 |
| 6 | £2,546 | £516 | £2,030 | £9,211 |
| 7 | £2,546 | £412 | £2,133 | £7,078 |
| 8 | £2,546 | £303 | £2,243 | £4,835 |
| 9 | £2,546 | £188 | £2,357 | £2,478 |
| 10 | £2,546 | £68 | £2,478 | £0 |
Digging deeper into your loan
Amortisation matters: In the early years, you'll pay a good chunk toward interest. The magic here is amortisation, and it's something every borrower should understand. It's easy to think you're chipping away at the debt when, in reality, the interest is front-loaded.
Interest vs Principal: By the end of the loan term, you'll have paid £5,456 in interest, which is around 21.43% of your total repayment. It's important to realise that with different rates or loan durations, this can change dramatically.
Consider the loan term: Shorter loan terms mean higher monthly payments but save you a lot on interest. For example, paying off this same loan in 9 years instead of 10 years would hike your monthly payment to £230 but cut your total interest to £4,877, meaning you'd pay only about 19.61% of your total payments in interest.
Changing interest rates: If the interest rate were 6.00% instead of 5.00%, you'd end up paying a total of £26,645 over the same 10 years — an extra £1,189 in interest.