Personal loan refinance calculator
Not a lender · illustrative only.Figures are examples, not offers or advice.
Estimate monthly saving, fee break-even months, and lifetime interest difference when refinancing a personal loan.
Methodology: how this is calculated · Last checked:
Your inputs
Results
Current monthly
£269.17
New monthly
£254.03
Monthly saving
£15.14
Break-even
1 year 2 months
Remaining interest if you stay
£1,690
New loan interest
£1,145
Lifetime saving (after fees)
Negative means refinance costs more overall
£345
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. Break-even months ≈ refinance fees ÷ monthly payment saving.
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.
- The current monthly payment is recalculated as a reducing-balance payment on the balance you enter, at the current rate, over the months remaining (rounded to whole months).
- The new monthly payment is the same formula on the same balance at the new rate over the new term.
- Monthly saving = current payment − new payment.
- Break-even month = fees ÷ monthly saving, rounded up, when the saving is more than 1p. With no fees and no increase it shows month 0; if the new payment is not lower there is no break-even.
- Each option is amortised in full. Lifetime saving = interest left on the current loan − (interest on the new loan + fees). A negative figure means the switch costs more overall.
- Fees are not added to the loan balance; they are treated as paid separately.
Equations & assumptions
Break-even months ≈ refinance fees ÷ monthly payment saving (when saving > 0). Lifetime saving ≈ remaining interest on current loan − (new loan interest + fees).
- Capital-and-interest reducing balance; monthly rate = APR ÷ 12. Representative APR on UK credit ads may include fees — we model fees separately unless stated.
- Current loan assumed to continue on its remaining term at the current rate.
- No early repayment charge on the current loan modelled — add any ERC into fees.
Using this calculator well
When to use it
Use this when a new loan at a lower rate is on offer and you already have a loan running. It weighs the interest you would save against the costs of switching, such as an arrangement fee on the new loan and any compensation on settling the old one, and shows how many months it takes to break even. It is most useful when the rate gap is modest or the remaining term is short, because that is where switching costs can cancel out the saving.
Common errors to avoid
- Using the original loan amount instead of the balance you owe today.
- Choosing a new term much longer than the time left on the old loan and counting the lower payment as a saving.
- Ignoring the early settlement compensation the old lender may charge.
- Forgetting a new application means another hard search on your credit file.
- Not asking the old lender for a settlement figure in writing first. Without it, the cost of switching here is only an estimate, and the break-even month may move.
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.
- Fees on both sides. Add the new lender’s arrangement fee and any early settlement compensation from the old lender into the fees box. Leaving either out overstates the saving.
- Term creep. Moving to a longer term is the most common way a lower payment costs more in the end. Compare lifetime saving, not only the monthly figure.
- Credit score. Eligibility checkers use a soft search that other lenders cannot see; a full application leaves a hard search on your credit file. Several hard searches close together can make the next lender more cautious. See MoneyHelper on hard and soft credit checks. The rate you are finally offered may not be the advertised representative APR, which only 51% of accepted applicants must receive.
- 14-day withdrawal. For most regulated credit agreements you can withdraw within 14 days (Consumer Credit Act 1974, s66A), repaying the credit plus interest for the days you had it. It is a safety net, not a reason to rush.
General information only, not advice. LoanCalc Lab is not a lender or broker and does not recommend borrowing.
Notes & FAQs
How do I map a refinance offer to these fields?
Use the lender’s settlement figure as remaining balance, the current schedule rate and months left, then the new rate, new term and all refinance fees. EXAMPLE Loan A (~£281.36 / month on £8,500 · 24.9% · 48 months) versus a cheaper rate with a £195 fee is the worked pattern on this site.
What is the refinance fee trap?
A lower rate can still lose if fees and a short remaining term mean you never earn back the upfront cost. Watch break-even months and lifetime saving together — not only the new monthly payment.
What is the break-even figure not?
Not a guarantee you will be accepted, not the early-settlement quote itself, and not advice to remortgage a home. It is an illustrative crossover for one unsecured personal loan versus another.
When should I not use this refinance calculator?
Do not use it for residential mortgages, further advances secured on property, or deals where the settlement figure includes products this page does not model. Get the real settlement letter first.
What if the new term is longer?
A lower rate with a longer term can cut the monthly payment but increase total interest. Watch lifetime saving, not only the monthly figure.
Should I include an early-settlement fee?
Yes — add any early-settlement or discharge fee into the refinance fees field so break-even is not understated.
Why can monthly saving look good while lifetime saving looks poor?
Stretching the term lowers the instalment even when total interest rises. Lifetime saving is the fairer headline for “does refinancing pay?”.
Does a break-even of zero mean I should refinance?
Only that fees are nil or already covered by the monthly cut under this simple model. Still check eligibility, settlement timing and whether the new loan’s terms fit your plans.
Why is the current payment slightly different from my statement?
The page recalculates the payment from the balance, rate and months left. If your balance came from a settlement figure or the lender uses daily interest, the result can differ slightly from your contractual payment.
What if the remaining term is very short?
With only a few months left, the monthly saving is small and fees take longer to recover. EXAMPLE: £3,000 with 12 months left moving from 12.9% to 8.9% with a £200 fee saves about £5.60 a month — break-even is 36 months, so the switch never pays back within the term.
Related tools & guides
Who this refinance calculator is for
Use it when one unsecured personal loan would be replaced by another. Enter the lender’s settlement figure, not a guessed balance. Not a mortgage product-transfer tool — that sits on Remortgage Lab. Add any early-settlement fee into the refinance fees here.
EXAMPLE Loan A (£8,500 · 24.9% · 48 months, about £281.36 / month) versus a cheaper rate with a £195 fee: the fee wipes the cut if few months remain, and a longer new term can raise lifetime interest while the monthly figure falls. Watch lifetime saving. Guides: refinance when it pays, early settlement. Disclaimer.
Case study: Loan A and a cheaper offer
A borrower with EXAMPLE Loan A — £8,500 outstanding at 24.9% with 48 months left, £281.36 a month — has improved their credit file and sees an illustration at 14.9% over 48 months with a £195 fee. The calculator shows a new payment of £236.13, a saving of £45.23 a month, the fee recovered in month 5, and a lifetime saving of about £1,976.
The same offer over 72 months looks better each month — £179.27, a saving of £102.09 — and breaks even in month 2. But lifetime saving falls to about £403 because interest runs for two extra years. The default example on this page shows the trap more starkly: £8,000 at 12.9% with 36 months left, moved to 8.9% over 36 months with a £200 fee, saves about £345 overall; stretched to 60 months it costs about £451 more. Remember to add any early settlement compensation from the old lender to the fees.
Edge cases
Rates outside 0–50%, a zero balance or a negative fee show a message. If the new monthly payment is not lower, there is no break-even month and the tool says so rather than inventing one.
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.