Interest Rate Calculator guide
Interest Rate Calculator: What Rate Am I Really Paying?
Use our interest rate calculator to work out the interest rate and APR on a loan from the amount borrowed, monthly payment and term.
By the AllCalculator editorial teamUpdated 16 October 20261 min read
Sometimes you know the monthly payment but not the rate, for example with some store finance or a private loan. Our Interest Rate Calculator works backwards to find it.
How to use the calculator (Interest Rate Calculator)
- Enter the amount borrowed.
- Enter the monthly payment.
- Enter the term in months.
You'll see the monthly rate, the nominal annual rate and the APR.
How it works
There's no simple formula to solve for the rate, so the calculator tries rates until the payment matches, a method called iteration. It then converts the monthly rate to:
- Nominal annual rate = monthly rate × 12
- APR = (1 + monthly rate)¹² − 1
A worked example
With the calculator's default settings, borrowing £10,000 and paying £240 a month for 48 months means an APR of about 7.35%. You'd pay £1,520 in interest.
Frequently asked questions
Why is the APR higher than the nominal rate?
Because APR includes the effect of monthly compounding over the year.
Does this include fees?
Only if they're built into the payment. For upfront fees, use our APR Calculator.
What's a good rate for a personal loan?
It depends on Bank of England Bank Rate, the amount and your credit history. Compare representative APRs from several lenders.
Sources and further reading
Links open official and independent websites in a new tab.
This guide is general information to help you understand your options. It isn't financial, tax, legal or building advice and doesn't take your personal circumstances into account. Figures were checked when the guide was last updated and can change, so confirm anything important with GOV.UK, HMRC, a regulated adviser or a qualified tradesperson.