Overview
This loan early repayment calculator shows what happens when you pay extra towards a personal loan — through a higher monthly payment, a one-off lump sum, or both. Enter your outstanding balance, APR and remaining term, add your overpayment, and you'll see how many months you could shave off, the interest you'd save, and how any early settlement charge affects the net benefit. Clearing a loan early almost always saves interest, but some agreements apply a settlement fee, so the tool lets you factor that in for a realistic figure.
How it's calculated
A personal loan is repaid in equal monthly instalments made up of interest and capital. We simulate it month by month, twice — your current schedule and your schedule with overpayments — and compare them.
- Interest each month is charged on the outstanding balance.
- Any extra you pay comes straight off the balance, so less interest builds up afterwards.
- An optional settlement charge is deducted from your interest saving to show the net benefit.
Under the Consumer Credit Act, lenders can add a limited early-settlement interest charge — typically up to about one to two months' interest — which the calculator can estimate.
Net saving = interest saved − early settlement charge
Interest saved is the difference in total interest between your original schedule and the overpayment schedule. Always confirm the exact figure with a lender settlement quote.
Worked example
Take a £10,000 loan at 8.9% APR with 5 years left, paying £100 extra a month:
| Contractual monthly payment | £207 | |
|---|---|---|
| Extra each month | £100 | |
| Time saved | ≈ 1 year 10 months | |
| Interest saved | ≈ £940 | |
| New term | ≈ 3 years 2 months |
An extra £100 a month could clear this loan nearly two years early and save roughly £940 in interest. If your agreement has a settlement charge, set it above to see the net saving.
Current rates & key facts
Loan early repayment — key facts
| Item | Detail |
|---|---|
| Right to settle early | You can legally repay a regulated loan early, in part or full, at any time |
| Settlement interest charge | Lenders may add up to ~1–2 months’ interest on early settlement |
| Best strategy | Overpaying early in the term saves the most, as more interest is still to come |
Early settlement rules vary by agreement. Always request an official settlement figure from your lender before repaying in full.
Last updated 29 June 2026 · Source: MoneyHelper — Paying off a loan early