The calculation runs in the browser. It is general mathematics, not a UK financial product.
Loan comparison
Two fixed-rate loans: monthly payment, interest, and the total repaid if each loan runs to term.
The annual rate is the nominal rate you enter, divided by 12. This is not the APR required for UK consumer credit, and it is not a loan offer.
36-month offer
Loan A
60-month offer
Loan B
Result
36-month offer costs less over the full term.
The total repaid differs by £1,529.93 (6.882 %). The lower monthly payment is 60-month offer. Those can be different offers.
- Lower total repaid
- 36-month offer
- Lower monthly payment
- 60-month offer
- Difference in totals
- £1,529.93
- Difference in interest
- £1,529.93
| Offer | Monthly payment | Total interest | Total repaid |
|---|---|---|---|
| 36-month offer | £617.54 | £2,231.51 | £22,231.51 |
| 60-month offer | £396.02 | £3,761.44 | £23,761.44 |
Method
The monthly payment uses the annuity formula P × r × (1+r)^n / ((1+r)^n − 1). r is the annual rate you entered, divided by 12. At 0% the payment is P / n. Interest is the sum of payments minus the amount borrowed. Displayed amounts are rounded to pence.
Assumptions
- The table uses the scheduled payment for the full term. An optional extra payment is added on top and does not change the rate.
- No early-repayment charge, no balloon payment, and no payment holiday.
- Amounts are shown in pounds sterling. That is the unit of calculation, not an official UK price.
Questions
Why can the lower payment cost more overall?
A longer term spreads the same amount over more months. Interest has more time. Read the total next to the payment.
Is this the UK APR?
No. The rate here is nominal and is used to calculate the monthly payment. Fees outside the amount borrowed are not included. It is not the APR required for UK consumer credit.
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