Work out the monthly payment, total interest and payoff schedule for any personal, auto or other fixed-rate loan.
| Year | Interest paid | Principal paid | Remaining balance |
|---|
Fixed-rate loans — personal loans, auto loans and most student loans — use the same amortisation formula as mortgages: M = P × r(1+r)n / ((1+r)n − 1). Your payment stays constant while its composition shifts from interest-heavy to principal-heavy over time. Because personal and auto loans are shorter than mortgages, the effect is compressed: on a 5-year loan at 8.5%, roughly the first two years’ payments are dominated by interest.
The advertised APR (annual percentage rate) includes fees spread across the loan, so it is the fairest number for comparing offers — a loan with a lower rate but high origination fees can have a higher APR than a competitor. Enter the APR in the rate field above for the most honest comparison. In the UK, lenders must show a representative APR, which makes comparison shopping straightforward.
Both save interest, but differently. A shorter term usually comes with a lower rate and forces the saving; extra payments on a longer loan give you flexibility to pay the minimum in tight months. If your loan has no prepayment penalty — most personal loans don’t, some auto loans do — paying extra toward principal is one of the highest guaranteed “returns” available, equal to your loan’s interest rate.
The interest rate is the cost of borrowing alone; APR adds fees and spreads them over the loan term. Always compare loans by APR, not the headline rate.
Yes, if extra payments go toward principal and there is no prepayment penalty. Even rounding your payment up each month can shave months off the loan.
Most personal loans have none, but some auto and secured loans do. Check your agreement before making large extra payments.
Fixed rates give predictable payments; variable rates start lower but can rise. For budgeting certainty, most borrowers prefer fixed.
Dramatically. Doubling the term roughly doubles the interest even at the same rate, because you pay interest for twice as long on a slowly shrinking balance.