£15,000 Personal Loan over 5 years: what it costs each month
What a £15,000 personal loan over 5 years costs at different rates
The rate you are offered depends on your credit score, your income and how much you borrow. The same £15,000 over 5 years can cost very different amounts, so it is worth seeing the whole range before you apply.
Moving the rate by one percentage point, from 9.9% to 10.9%, changes the monthly payment by about £6.73 and the total interest by about £404.
£15,000 over 5 years by interest rate
| APR | Monthly payment | Total interest | Total repaid |
|---|---|---|---|
| 5.9% | £288.23 | £2,294 | £17,294 |
| 7.9% | £301.48 | £3,089 | £18,089 |
| 9.9% | £314.86 | £3,892 | £18,892 |
| 14.9% | £348.79 | £5,927 | £20,927 |
| 19.9% | £383.24 | £7,995 | £22,995 |
| 24.9% | £418.06 | £10,084 | £25,084 |
Fixed rate, equal monthly payments, no fees.
The formula behind the payment
The payment on a fixed-rate loan is: amount × monthly rate ÷ (1 − (1 + monthly rate)−months). For £15,000 over 60 months at 9.9% APR the monthly rate is 0.7898%, which gives £314.86. Multiplying by 60 months gives £18,892 repaid in total, so the cost of borrowing is £3,892.
Should you borrow £15,000 over 5 years or a different term?
A longer term lowers the monthly payment but you pay interest for longer. At 9.9% APR, repaying £15,000 over 1 year costs £1,315.09 a month and £781 in interest, while 7 years costs £244.99 a month and £5,579 in interest. That is £4,798 more for the lower payment.
£15,000 at 9.9% APR by term
| Term | Monthly payment | Total interest | Total repaid |
|---|---|---|---|
| 1 year | £1,315.09 | £781 | £15,781 |
| 2 years | £688.56 | £1,525 | £16,525 |
| 3 years | £480.34 | £2,292 | £17,292 |
| 4 years | £376.68 | £3,081 | £18,081 |
| 5 years | £314.86 | £3,892 | £18,892 |
| 7 years | £244.99 | £5,579 | £20,579 |
Interest versus capital: where your payments go
Early payments are mostly interest. In year 1 of this £15,000 loan, £1,316 of your £3,778 goes on interest and £2,462 reduces what you owe. By the last year the split reverses, which is why paying off a loan early saves more in the early years than the later ones.
£15,000 at 9.9% APR over 5 years
| Year | Interest paid | Capital repaid | Balance left |
|---|---|---|---|
| 1 | £1,316 | £2,462 | £12,538 |
| 2 | £1,073 | £2,706 | £9,833 |
| 3 | £805 | £2,973 | £6,859 |
| 4 | £511 | £3,268 | £3,591 |
| 5 | £187 | £3,591 | £0 |
Totals for each year of the loan.
What happens if you overpay your £15,000 loan?
Paying a little extra each month cuts the balance faster, so less interest is charged. Check that your lender allows overpayments and whether there is a charge: many allow up to a set amount a year without one.
Overpaying a £15,000 loan at 9.9% APR
| Extra payment | New monthly payment | Loan cleared in | Interest saved |
|---|---|---|---|
| +£30 a month | £344.86 | 54 months | £442 |
| +£60 a month | £374.86 | 49 months | £792 |
| +£120 a month | £434.86 | 41 months | £1,311 |
Compared with the normal 5 years term. Fixed rate, no fees.
How to work out if the payment is affordable
A common check is to keep all debt repayments, including this personal loan, below about a third of your take-home pay. A £314.86 payment fits that guide if your monthly take-home pay is at least £945.
Also look at what happens if your income drops. Choose a payment you could still make for several months without borrowing again.
UK rules worth knowing before you borrow
- Use an eligibility checker first. A "soft search" shows likely offers without leaving a mark on your credit file, while a full application leaves a hard search.
- The advertised "representative APR" only has to be offered to at least half of the people who are accepted, so your own rate can be higher.
- You have a right to repay a loan early. The lender can charge a limited amount of interest for doing so, so check the early repayment terms.
- Free, impartial help with debts is available from MoneyHelper, Citizens Advice, StepChange and PayPlan.
Ways to pay less interest
- Pick the shortest term whose monthly payment you can comfortably afford. Going from 7 years to 1 year would save £4,798 on this loan.
- Improve your credit file before you apply: register on the electoral roll, correct errors and pay existing bills on time.
- Make extra payments when you can, as long as there is no penalty. Each extra payment cuts the balance that interest is charged on.
- Borrow only what you need: every extra £1,000 at 9.9% over 5 years adds about £20.99 to the monthly payment.
Sources and further reading
Questions people ask
How much is a £15,000 personal loan per month over 5 years?
How much interest will I pay on £15,000 over 5 years?
Is it cheaper to borrow £15,000 over a shorter time?
What income do I need for a £15,000 personal loan?
Does this calculator include fees?
Results are estimates for information only, not financial advice. Read the full disclaimer.