Loan overpayment calculator
Not a lender · illustrative only.Figures are examples, not offers or advice.
See how a regular overpayment or a one-off lump sum cuts interest and shortens the term on a personal loan.
Methodology: how this is calculated · Last checked:
Your inputs
EXAMPLE Loan A defaults (£8,500 · 24.9% EXAMPLE rate · 48 months · £0 fee) — illustrative only, not a live quote. Default extra £50/month shows early-payoff impact; set to £0 to match the base EMI schedule.
Results
Contractual monthly
£281.36
Effective monthly (with extra)
£331.36
Interest without extras
£5,005
Interest with extras
£3,760
Interest saved
£1,245
Term without extras
4 years
Term with extras
3 years 1 month
Months saved
11 months
Method: Capital-and-interest reducing balance; monthly rate = APR ÷ 12. Representative APR on UK credit ads may include fees — we model fees separately unless stated.
Most people next
Illustrative only — not personalised advice, not a credit offer, and not an FCA-regulated recommendation. LoanCalc Lab is not a lender or broker. Check the lender’s pre-contract information for the APR, fees and early settlement terms. Rates and fees change. Full calculator disclaimer.
How this is calculated
Step by step, exactly as the calculator above works it out. Nothing is sent to a server — the sums run in your browser.
- A base schedule is built on the reducing-balance payment for the loan amount, rate and term, with no extras.
- A second schedule uses the same base payment plus your monthly extra every month from month 1. Any lump sum is added in month 1 only.
- Each month, interest = balance × annual rate ÷ 100 ÷ 12, and the whole payment (base + extra) is applied after that interest. Payments are capped so the balance never goes below zero.
- The extra schedule runs until the balance is cleared (below half a penny), with a safety cap of the term plus 600 months (never more than 720).
- Interest saved = base interest − interest with extras. Months saved = base months − months with extras. New monthly outgoing = base payment + monthly extra.
- The page assumes your lender reduces the term, not the payment, and applies every extra to principal straight away.
Equations & assumptions
Base schedule uses the contractual amortising payment. Extra monthly (and optional month-1 lump sum) are applied to principal after interest each month until the balance clears.
- Capital-and-interest reducing balance; monthly rate = APR ÷ 12. Representative APR on UK credit ads may include fees — we model fees separately unless stated.
- No early repayment charge modelled.
- Extra payments assumed to reduce term (not reduce future contractual payment).
- Starts from the same EXAMPLE Loan A principal, rate and term as EMI / amortisation.
Using this calculator well
When to use it
This is for anyone with spare cash who wonders whether overpaying a personal loan is worth it. Enter a regular monthly extra or a one-off lump sum and it shows how many months come off the term and how much interest you avoid. It suits the moment after a pay rise, a bonus or the end of another commitment, when you are deciding between overpaying, saving and keeping a buffer.
Common errors to avoid
- Overpaying before you have an emergency fund; money paid into a loan is hard to get back.
- Not checking whether the lender treats an overpayment as reducing the term or the monthly payment.
- Forgetting that a fixed-rate agreement may allow a small compensation charge on large early repayments.
- Comparing the interest saved with a savings rate before tax, when your savings interest may be taxed.
- Paying the extra by card or into the wrong account. Ask the lender how to make an overpayment so it is applied to the balance rather than held as credit, and confirm it in writing.
UK traps and limits to check
- Early settlement fees. On most regulated UK personal loans you can repay part or all of the loan early (Consumer Credit Act 1974, s94). On a fixed-rate loan the lender may charge compensation, capped at 1% of the amount repaid early (0.5% if 12 months or less remain), and generally only where early repayments exceed £8,000 in a 12-month period. The rebate rules sit in the Consumer Credit (Early Settlement) Regulations 2004; MoneyHelper explains them in plain English in repaying a personal loan early. Ask the lender for a settlement figure rather than relying on any schedule.
- Emergency savings first. MoneyHelper suggests keeping some savings for emergencies before paying debts down faster — see how to reduce borrowing on credit.
- Ask how extras are applied. Some lenders hold overpayments, lower the next instalment, or need a request in writing to cut the term. The saving shown assumes the term shortens.
- Clear the most expensive debt first. If you also have card debt at a higher rate, an extra £1 there usually saves more than on a cheaper loan. The snowball vs avalanche planner compares orders.
- Variable vs fixed. These calculators hold the rate constant for the whole term, which matches a fixed-rate loan. Some loans and most credit cards are variable, so the real figure can move — for example when the Bank of England Bank Rate changes and a lender passes it on. Re-run the numbers with a higher rate to see how much headroom you have.
General information only, not advice. LoanCalc Lab is not a lender or broker and does not recommend borrowing.
Notes & FAQs
How do I map my loan into the extra-payment fields?
Start from the same principal, rate and remaining term as your illustration or EMI run. EXAMPLE Loan A (£8,500 · 24.9% · 48 months) plus £50 extra a month is the worked pattern — term and interest fall only if extras reduce principal as modelled.
What fees can wipe the benefit of overpaying?
Early-settlement or overpayment fees can erase interest savings. If your agreement charges for going faster, add that cost mentally (or via the refinance tool’s fee field for a full refinance) before celebrating the saving.
What is the interest-saved figure not?
Not a lender guarantee, not tax advice, and not permission to skip contractual payments. The base schedule still assumes you pay the contractual EMI every month.
When should I not use this extra-payment calculator?
Do not use it if extras are not allowed, if they are only accepted on set dates this page does not model, or if you would be left without an emergency buffer. Meeting essentials comes first.
Will my lender allow this?
Many personal loans allow overpayments; some charge early repayment fees. Check your agreement before sending extra money.
What is the difference between a regular extra and a one-off?
A regular extra applies every month on top of the EMI. A one-off is modelled in month 1 only. Both cut interest only if the lender applies them to principal promptly.
Why does EXAMPLE Loan A plus £50 save about £1,245?
Under this reducing-balance model the term falls from 48 months to about 37 and interest from about £5,005 to about £3,760 — if extras hit principal as assumed. Your lender’s day-count may differ slightly.
Should I overpay or refinance instead?
Compare both. If a new rate plus fees beats disciplined extras on lifetime cost, the refinance break-even tool is the clearer next step; otherwise staying and overpaying can be simpler.
Is a lump sum better than the same money spread monthly?
Money paid earlier saves more interest, so a lump sum in month 1 beats the same total spread out. But it uses cash up front. EXAMPLE Loan A: a £1,000 lump sum saves about £1,424 and 8 months; £50 a month saves about £1,245 and 11 months.
Will overpaying trigger an early repayment charge?
On a fixed-rate regulated loan, compensation is usually only allowed when early repayments exceed £8,000 in any 12 months, and is capped at 1% (0.5% in the final year). Check your agreement and ask the lender before paying.
Related tools & guides
Who the extra-payment calculator is for
Use it when you want to see what a regular extra or a lump sum does to interest and months left. Extras only cut interest if the lender applies them to principal. Not a mortgage overpayment tool and not an early-settlement quote — see early settlement on personal loans.
EXAMPLE Loan A plus £50 a month: term falls from 48 months to about 37; interest from about £5,005 to about £3,760; saving about £1,245 — if extras are allowed in full. Trade-off frame: overpaying vs saving. Disclaimer.
Case study: a pay rise and Loan A
A borrower has just taken out EXAMPLE Loan A — £8,500 at 24.9% over 48 months, £281.36 a month and £5,005.36 interest in total — and expects to have some spare money each month. Adding £50 a month cuts the term to 37 months and saves about £1,245 in interest. Adding £100 a month cuts it to 31 months and saves about £1,977.
If instead a one-off £1,000 went in at the start, the loan would end in 40 months and save about £1,424. These amounts are well under the £8,000-a-year level above which a lender may charge compensation on a fixed-rate loan. Before overpaying, the borrower should keep an emergency buffer, check there is no dearer card debt to clear first, and confirm in writing that the lender will shorten the term.
Edge cases
Extras of £0 return the original schedule. A very large extra or lump sum clears the loan early and the tool stops at zero balance — it never shows a negative balance. Terms outside 1–420 months or rates outside 0–50% show a message.
Sources for product-norm wording only: MoneyHelper — credit; FCA consumer credit. Case-study figures are EXAMPLES produced by this calculator’s own code, not a quote or an offer. Last checked 24 October 2026.