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How to calculate loan repayment?

Written byKoyo Loans
First published17th October 2022
  • Introduction
  • How to calculate loan repayment?
  • Can I freeze my loan repayments?
  • Can you repay a loan early?
  • How to repay a loan quickly?
  • Conclusion

In 30 seconds…

Understanding the repayment terms attached to a loan is really important. You can work out your repayment terms by using a loan calculator, which indicates the representative rate you could pay for your loan. Once you submit an application, the lender will offer you an APR based on your creditworthiness. You can then set a repayment plan in motion once the money is in your account. At the very least, you should meet the monthly repayments, and you might even be able to pay the money back early without a fee.


Figuring out the loan repayment process is vital before you submit a loan application. Different lenders have different methods, so make sure to conduct the necessary research beforehand. Furthermore, diving into your own financial situation will help you make the right decision. In this article, we answer some commonly asked questions regarding loan repayments.

How to calculate loan repayment?

The easiest way to calculate loan repayments is to use a loan calculator. Loan calculators enable you to find out what representative rate you could pay for your personal loan, which allows you to calculate your monthly repayments over the course of the credit agreement.

You can enter how much you would like to borrow, and the period of time that you would like to have to pay the money back. Most personal loans can be paid back over a period of one to five years, and you can typically borrow anything from £1,000 to £20,000, depending on the lender that you apply to.

Just be mindful that loan calculators are only good for estimating how much your loan repayments are likely to be. Every borrower is different, and the rate of APR that you are offered will depend on your credit history and your current financial circumstances. So, you can use a loan calculator as a guide, but be mindful that your repayments might be slightly different when your loan application is approved.

Can I freeze my loan repayments?

If you encounter financial difficulties, you can contact your lender and ask them to consider freezing your loan repayments for a specific period of time. However, you should be aware that every lender uses its own criteria for deciding whether or not to accept your request.

The FCA stipulates that lenders must consider any request to freeze loan repayments if a customer is experiencing financial distress. So, if you find that you’re struggling to meet your repayments, it’s best to contact your lender directly to explain your current financial circumstances. Be honest with them and be prepared to show proof if they ask for it, as it will help your case.

There’s no guarantee that your lender will accept your request to freeze your loan, but it’s worth getting in touch if you’re concerned about your current financial circumstances. You could always get in touch with the Citizens Advice Bureau for free, non-judgemental debt advice if you’re struggling with your repayments. Some people find it easier to connect with such organisations rather than going straight to lenders, so it’s a viable alternative to consider.

Can you repay a loan early?

If you’re financially able to do so, you can repay your loan early. However, you need to be aware that some loan providers attach early repayment charges (ERCs) to their loans, so you need to check the terms and conditions of your agreement before deciding on the best course of action.

According to Consumer Credit Regulations 2004, lenders are permitted to charge up to two months of additional interest if you opt to pay your loan off early. While many lenders are upfront about this charge and will list it as an ERC, others are less transparent, and you will need to read through the terms and conditions to see whether you will be charged to pay back your loan early.

At Koyo Loans, we don’t charge you any additional fees if you wish to pay back your loan early. Request an Early Settlement Quotation and once received, you can log into your account and make a bulk payment to settle your loan in one transaction at no extra cost. So, if you’ve recently come into some money or have been good with your savings, you can settle your Koyo Loan in advance without worrying about ERCs or hidden fees.

How to repay a loan quickly?

Repaying a loan quickly is all about improving your financial management. There are lots of small steps you can take to readdress your current debt levels, which will then enable you to increase the amount you pay back on your loan more quickly.

For instance, instead of making monthly repayments on your loan, re-arrange your finances so you make bi-weekly payments. If you do this, just make sure that your loan doesn’t come with ERCs, as it won’t be financially viable to make overpayments if you get charged. Another option is to strip back some of the luxuries in your life and free up any additional funds to contribute directly to your loan repayments.

You could look at cancelling expensive subscriptions and direct debits and use the money that you save to contribute towards your repayments. Another viable option is to round up the monthly repayments on your loan. For instance, if you’re required to pay back £130 per month, you could round up your direct debit to £150 and pay off an extra £20 per month. While it’s a small amount, it all adds up and helps you pay back your loan more quickly.


As mentioned above, loan repayments are an essential part of the loan process and an element that should be considered when submitting an application. Use our loan calculator to work out your potential monthly repayments, 24.9% APR Representative.

Koyo Loans is the trading name of BETR Technology Ltd. Company No. 11483187. Registered Office: Huckletree Soho, Ingestre Court, Ingestre Place, London, W1f 0JL

Key Takeaways

Working out a repayment plan for your loan is crucial. As well as meeting the minimum monthly repayments, you might consider increasing the payments so you can pay back your loan early. Some lenders will charge you a fee to do this, while others won’t. These are known as early repayment charges, and lenders are permitted to charge up to two months of additional interest for early repayment.

You can repay your loan early by making adjustments to your budget. Cancelling expensive subscriptions or working a side hustle can all free up some funds that you can channel into your debt repayments. Essentially, reworking your personal finances can get you out of debt more quickly.

As mentioned, meeting your monthly repayments is vital. If you miss or delay repayments, your credit score will take a hit as a result, which will affect your ability to access credit in the future. Many lenders don’t charge a fee if you wish to pay back your loan early, making it a viable option if you have the money available in your account. Repaying your loan early can be liberating and allows you to focus on other aspects of your financial life.

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