How do you calculate payments on a loan?
Payments on your loan are calculated by considering how much you want to borrow, how long you want to borrow it for, and how much it will cost you to borrow this money including any fees. A lender will use the annual percentage rate (APR) on this sum to give you a fixed monthly payment over the duration of your loan.
Some lenders offer an online loan calculator to help you see what your repayments could look like if you chose to borrow with that specific lender.
At Shawbrook, we believe that loan calculators don’t accurately reflect what interest rate you’ll get when you apply for a loan. When you use a loan calculator, this may not be the actual rate you receive so it doesn’t give a clear picture of the rate you’ll get and the associated repayments until you have applied.
Instead of using loan calculators, we offer you a guaranteed rate through our quote tool which provides you with a breakdown of your repayment costs based on the actual APR that you’re eligible for. And don’t worry, applying for a quote will not affect your credit score.
For more information, read our guide on why we don’t use loan calculators.