EMI Calculator UK | Monthly Loan Repayment Calculator 2025
Free EMI UK | Monthly Loan Repayment 2025 calculator for the UK. Get instant, accurate results with our easy-to-use online tool. Updated for 2025/26 with...
Last updated: February 2026
EMI Calculator UK
Calculate your Equated Monthly Installment (EMI) for personal loans, car finance, or mortgages. See exactly how much you'll pay each month and the total interest cost.
Your Monthly EMI
Amortization Schedule
| Month | Payment | Principal | Interest | Balance |
|---|
What is EMI?
EMI (Equated Monthly Installment) is the fixed amount you pay to the lender each month until the loan is fully repaid. It includes both principal repayment and interest.
How EMI is Calculated
The EMI formula uses compound interest mathematics to calculate equal monthly payments:
P = Principal loan amount
r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
n = Number of monthly payments (loan term in months)
Example Calculation
For a £10,000 loan at 7.5% APR over 36 months:
- Monthly rate (r) = 7.5 ÷ 12 ÷ 100 = 0.00625
- EMI = £10,000 × 0.00625 × (1.00625)36 ÷ [(1.00625)36 - 1]
- EMI = £311.06 per month
- Total payment = £311.06 × 36 = £11,198.16
- Total interest = £11,198.16 - £10,000 = £1,198.16
Typical UK Personal Loan Rates (2025)
Interest rates vary based on loan amount, term, and your credit score. Here are typical representative APRs:
| Loan Amount | Excellent Credit | Good Credit | Fair Credit |
|---|---|---|---|
| £1,000 - £2,999 | 9.9% - 15.9% | 15.9% - 24.9% | 24.9% - 39.9% |
| £3,000 - £4,999 | 6.9% - 9.9% | 9.9% - 15.9% | 15.9% - 29.9% |
| £5,000 - £7,499 | 5.9% - 7.9% | 7.9% - 12.9% | 12.9% - 24.9% |
| £7,500 - £14,999 | 5.9% - 6.9% | 6.9% - 10.9% | 10.9% - 19.9% |
| £15,000+ | 5.9% - 6.9% | 6.9% - 9.9% | 9.9% - 15.9% |
Important: Representative APR
UK lenders must offer their advertised rate to at least 51% of successful applicants. The rate you receive depends on your individual circumstances and credit history. Always compare personalised quotes.
Tips to Get Better Loan Rates in the UK
Check Your Credit Score
Use free services like Experian, Equifax, or ClearScore to check your score before applying. Fix any errors and pay down existing debt.
Borrow the Right Amount
Rates are often better for loans between £7,500-£15,000. Consider if borrowing slightly more (at a lower rate) saves money overall.
Use Eligibility Checkers
Most lenders offer soft-search eligibility checkers that don't affect your credit score. Use these to compare likely rates.
Choose the Right Term
Shorter terms mean higher monthly payments but less total interest. Longer terms are more affordable monthly but cost more overall.
Consider Secured Options
Homeowners can often get lower rates with secured loans, but your home is at risk if you can't repay. Weigh the risks carefully.
Avoid Multiple Applications
Each full application leaves a footprint on your credit file. Too many in a short time can lower your score and reduce approval chances.
Types of UK Loans
| Loan Type | Typical APR | Term | Best For |
|---|---|---|---|
| Personal Loan | 5.9% - 24.9% | 1-7 years | Home improvements, debt consolidation, large purchases |
| Car Finance (HP) | 6.9% - 12.9% | 2-5 years | Vehicle purchase (you own after final payment) |
| Car Finance (PCP) | 5.9% - 9.9% | 2-4 years | Lower monthly payments, option to buy or return |
| 0% Credit Card | 0% intro (then 18-24%) | Up to 29 months | Smaller purchases you can pay off quickly |
| Mortgage | 4.5% - 6.5% | 5-35 years | Property purchase or remortgage |
Understanding EMI: The Reducing Balance Method
When you take out a loan in the UK, the vast majority of personal loans and mortgages use the reducing balance method (also called the diminishing balance method) to calculate interest. This is the standard approach behind EMI calculations, and understanding how it works can help you make better borrowing decisions.
How the Reducing Balance Method Works
Under the reducing balance method, interest is charged each month only on the outstanding principal -- not on the original loan amount. As you make monthly payments, a portion goes towards interest and the remainder reduces the principal. Because the principal decreases with every payment, the interest portion shrinks over time while the principal portion grows. This is why your first few payments are heavily weighted towards interest, and the final payments are almost entirely principal repayment.
For a concrete example, consider a £15,000 personal loan at 6.9% APR over 5 years (60 months). Your fixed EMI would be approximately £296.53. In the very first month, about £86.25 goes towards interest (£15,000 x 6.9% / 12) and £210.28 towards principal. By month 30 (halfway through), approximately £53.40 is interest and £243.13 is principal. In the final month, only about £1.70 is interest, with the remaining £294.83 clearing the last of the principal.
Three Factors That Determine Your EMI
Your monthly repayment amount is determined by exactly three variables:
- Principal Amount (P): The total amount you borrow. A larger loan means a higher EMI, though rates are often better for amounts between £7,500 and £15,000 from UK lenders.
- Interest Rate (r): The annual percentage rate charged by the lender. Even small differences in rate have a significant impact over longer terms. A 1% rate difference on a £10,000 five-year loan changes total interest by roughly £270.
- Loan Tenure (n): The repayment period in months. Longer tenures reduce monthly payments but substantially increase total interest paid. Balancing affordability against total cost is one of the most important decisions when choosing a loan.
What Is Amortisation?
Amortisation is the process of gradually repaying a loan through scheduled, equal payments over time. An amortisation schedule (also shown by our calculator above) provides a month-by-month breakdown showing exactly how much of each payment goes towards interest and how much reduces the principal. Reviewing this schedule before taking a loan helps you understand the true cost of borrowing and shows how making overpayments can save significant money.
The Impact of Making Overpayments
Making overpayments -- either as regular additional amounts or lump sums -- is one of the most effective ways to reduce the total cost of a loan. Because interest is calculated on the outstanding balance, any extra payment immediately reduces future interest charges. For example, adding just £50 per month to a £10,000 loan at 7.5% APR over 5 years would save approximately £340 in interest and clear the loan 9 months early.
Under UK consumer credit law, you have the right to make partial or full early repayment on most regulated loans. Lenders may charge an early settlement fee equivalent to up to 58 days of interest (or 28 days if the loan has less than a year remaining), but the savings from reduced interest almost always outweigh this fee.
UK Personal Loan Market Overview
The UK personal loan market is highly competitive, with offerings from high-street banks, building societies, online lenders, and peer-to-peer platforms. Key features of the UK market include:
- Representative APR: By law, at least 51% of approved applicants must receive the advertised rate. Your actual rate may differ based on credit score and circumstances.
- Soft search eligibility checks: Most lenders now offer pre-approval tools that check your eligibility without leaving a mark on your credit file.
- FCA regulation: All UK consumer credit lenders are regulated by the Financial Conduct Authority, providing consumer protections including clear disclosure of terms and the right to early repayment.
- Section 75 protection: For credit card purchases between £100 and £30,000, the card provider is jointly liable with the retailer, offering additional buyer protection not available with personal loans.
Choosing the Right Loan Term
When selecting a loan term, aim for the shortest period where the monthly payment remains comfortable within your budget. As a general guideline, total loan repayments (including any existing debts) should not exceed 35-40% of your net monthly income. Use our calculator above to compare different term lengths and see exactly how much interest each option costs.
Frequently Asked Questions
EMI stands for Equated Monthly Installment. It's the fixed amount you pay to a lender each month until the loan is fully repaid. The EMI amount remains the same throughout the loan term (for fixed-rate loans), making it easy to budget. Each payment includes both principal repayment and interest.
EMI is calculated using the formula: EMI = P × r × (1+r)n / [(1+r)n - 1], where P is the principal, r is the monthly interest rate, and n is the number of months. Our calculator does this automatically. The early payments are mostly interest, while later payments are mostly principal (this is called amortization).
In 2025, competitive personal loan rates in the UK range from 5.9% to 9.9% APR for borrowers with good to excellent credit. Rates depend on the loan amount, term, and your credit score. The best rates are typically available for loans between £7,500 and £15,000 from high-street banks. Always compare representative APRs from multiple lenders.
APR (Annual Percentage Rate) includes the interest rate plus any mandatory fees, giving you the true cost of borrowing. UK lenders are legally required to show the representative APR. The basic interest rate alone doesn't include arrangement fees, so APR gives you a better comparison between different loan products.
Yes, the UK Consumer Credit Act gives you the right to repay regulated loans early. Lenders can charge an early repayment fee of up to 58 days' interest (or 28 days if less than a year remains). Despite this fee, you'll usually save on future interest. Always check your loan agreement for specific terms and request a settlement figure from your lender.
Using a soft search eligibility checker does NOT affect your credit score - only you can see it. However, when you formally apply for a loan, the lender performs a hard search which leaves a mark on your credit file visible to other lenders. Multiple hard searches in a short time can lower your score, so use eligibility checkers first.
Shorter term: Higher monthly payments but significantly less total interest paid. Good if you can afford it.
Longer term: Lower monthly payments but more total interest paid. Better for affordability.
Example: £10,000 at 7% APR costs £1,083 interest over 3 years vs £1,830 over 5 years. Choose based on what you can comfortably afford each month.
Related Calculators
Last updated: February 2026 | Rates are indicative and subject to change
Expert Reviewed — This calculator is reviewed by our team of financial experts and updated regularly with the latest UK tax rates and regulations. Last verified: February 2026.
Pro Tips for Accurate Results
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Understanding Your Results
Our Emi Calculator provides:
- Instant calculations - Results appear immediately
- Accurate formulas - Based on official UK standards
- Clear explanations - Understand how results are derived
- 2025/26 updated - Using current rates and regulations
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