Understanding borrowing
What is APR? Explained simply
Why a 149.9% APR loan can cost less than a 25% APR credit card — and why total repayable is the number you should actually focus on.
4 min read → Tools
How to use a loan calculator
and read the numbers
A loan calculator gives you four key outputs. Most people glance at the monthly payment and move on. This guide explains what each figure means, shows two worked examples, and covers what a calculator cannot tell you before you apply.
~6 min read • Cash Train editorial team
The four numbers a calculator gives you
Enter a loan amount, a term, and an APR and every reputable calculator returns the same four figures. Each one tells you something different.
Monthly repayment
The fixed amount leaving your account each month until the loan is cleared. This is what the lender will collect by direct debit on the agreed repayment date. It is the figure most people focus on — but it is only useful in the context of the total repayable.
FCA-authorised lenders must confirm the exact monthly instalment in the pre-contract credit information (SECCI document) before you sign.
Total repayable
The complete amount leaving your pocket across all payments: principal plus all interest plus any included fees. This single figure is the true cost of borrowing. It is the number to compare across lenders when the loan amount and term are the same.
Under the Consumer Credit Act 1974 and FCA CONC rules, lenders must show the total amount payable in the credit agreement before you sign.
Total interest
Total repayable minus the loan amount. It tells you how much the borrowing itself costs in pounds — separate from the money you actually receive. For short-term loans this is often a more intuitive figure than APR, because you can compare it directly to the value of what you're borrowing.
APR
Annual Percentage Rate — the total cost of credit expressed as an annualised percentage, including interest and mandatory fees. It is a standardised comparison tool, not a direct statement of what you will pay. For short-term loans the APR looks high because it scales a short-period cost to a full year. Two loans with the same APR but different terms will have different total interest costs.
The FCA requires all consumer credit advertisements to include a representative APR. "Representative" means at least 51% of applicants accepted for that product receive that rate or better.
Worked example 1 — term length and total interest
The same £2,000 borrowed at 39.9% representative APR, compared over 12 months and 24 months. The APR is identical — the total cost is not.
£2,000 at 39.9% representative APR — 12 vs 24 months
Figures are illustrative, calculated on a standard reducing-balance basis. Your actual rate will be confirmed in your personalised offer.
| Term | Loan | APR | Monthly payment | Total repayable | Total interest |
|---|---|---|---|---|---|
| 12 months | £2,000 | 39.9% | £195.26 | £2,343.12 | £343.12 |
| 24 months | £2,000 | 39.9% | £109.15 | £2,619.60 | £619.60 |
Doubling the repayment term from 12 to 24 months nearly doubles the total interest paid — from £343 to £620. The monthly payment falls by £86, but the extra convenience costs £277 over the life of the loan. The calculator shows you this clearly if you run both scenarios before applying.
Worked example 2 — how interest scales with loan size
Five different loan amounts, all on the same 24-month term at 39.9% APR. Shows how interest grows proportionally — and illustrates the value of borrowing only what you need.
24-month term at 39.9% representative APR — five loan amounts
| Loan amount | Monthly payment | Total repayable | Total interest |
|---|---|---|---|
| £500 | £27.29 | £654.96 | £154.96 |
| £1,000 | £54.58 | £1,309.92 | £309.92 |
| £1,500 | £81.86 | £1,964.64 | £464.64 |
| £2,000 | £109.15 | £2,619.60 | £619.60 |
| £2,500 | £136.44 | £3,274.56 | £774.56 |
Interest roughly doubles for every doubling of the loan amount on a fixed term and rate. Borrowing £2,000 instead of £1,000 costs an additional £310 in interest — not just £155. That relationship is linear: the calculator makes it visible before you commit.
Practical tip: borrow the minimum you actually need
Before confirming an amount, reduce it by £500 and run the calculator again. If the smaller amount still covers the need, the saving in interest is worth taking. On a 24-month loan at 39.9% APR, each £500 you don't borrow saves roughly £155 in total interest. The calculator is the fastest way to make that trade-off concrete.
APR vs flat rate — why the same loan looks different
Some lenders quote a "flat rate" or "monthly rate" instead of APR. These numbers are smaller and look more attractive. They describe the same loan — but they are not comparable across products without conversion. APR is the regulated standard that allows like-for-like comparison.
Quoted as APR
39.9%
Annual Percentage Rate
£2,000 over 24 months → Total repayable: £2,619.60
FCA-mandated standard — directly comparable across lenders
Quoted as flat rate
2.8%
Monthly flat rate (same loan)
£2,000 over 24 months → Total repayable: £2,619.60
Same loan — the effective APR is still 39.9%, just not stated upfront
If you see a flat or monthly rate quoted without an APR, convert it before comparing: a monthly flat rate of 2.8% on a reducing-balance loan is not 33.6% per year — the effective APR is meaningfully higher once the reducing balance is factored in. The safest approach is to ask for the APR and total repayable, then use those figures to compare.
What a calculator cannot tell you
A loan calculator is a useful planning tool, but it works with assumed inputs. Four things it cannot show you:
Your personal APR
The APR you enter in a calculator is usually the representative rate — the rate offered to at least 51% of accepted applicants. Up to 49% may be offered a higher rate based on their credit profile, income, and the lender's risk assessment. Your actual APR will only be confirmed in your personalised offer, after a credit check. Always read that offer before signing — not the advertised representative figure.
Hidden or optional fees
A standard calculator models interest only. Some lenders charge arrangement fees, payment protection insurance, or late payment fees that are not included in the APR calculation (because they are optional or conditional). Check the lender's full fee schedule alongside the calculator output.
Whether you can genuinely afford it
A calculator tells you the monthly payment amount. It cannot assess whether that amount is affordable in the context of your income, existing commitments, and financial resilience. That is an affordability judgement you need to make separately — and one the FCA requires lenders to make before approving any application under CONC 5.
Early repayment outcomes
Calculator outputs assume you make every scheduled payment and no more. FCA-regulated lenders must allow early settlement under CCA 1974 s.94. Cash Train is unregulated — CCA 1974 does not apply — but we give you the same right contractually: you can repay early at any time with no penalty. Ask your lender for a settlement figure before settling early.
Key facts at a glance
Monthly repayment: Fixed direct debit each month. Set against your disposable income — not take-home pay.
Total repayable: The number to compare across lenders. Loan + interest + fees.
Total interest: Total repayable minus the loan amount. The cost in plain pounds.
APR: Annualised standardised rate. High on short-term loans because it scales a short cost to a full year.
Representative APR: Offered to 51%+ of applicants. Your rate may be higher — confirm before signing.
Early repayment: Statutory right under CCA 1974 s.94 for regulated lenders. Cash Train gives you the same right contractually. Always request a settlement figure.
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Common questions
FAQ
A loan calculator shows your estimated monthly repayment, the total interest you will pay, and the total amount repayable for a given loan amount, term and interest rate. It helps you compare different combinations before applying, so you can choose a loan size and term that fits your budget.
No. Calculator results are illustrative estimates based on the rate and term you enter. Your actual rate may differ — it is confirmed after a credit and affordability assessment. Always check the final figures in your loan offer before signing.
A flat rate applies interest to the original loan amount throughout the term, regardless of repayments. APR (Annual Percentage Rate) reflects the true yearly cost including compounding and fees, making it a fairer comparison across products. Use APR when comparing loans from different lenders.
Yes. Enter your desired loan amount and repayment term into a loan calculator to see the estimated monthly payment. Compare that figure against your monthly disposable income (income minus all essential outgoings). If the payment is comfortably within your disposable income, a loan may be affordable for you.
See your numbers before you apply.
The Cash Train calculator shows monthly repayment, total repayable, and total interest upfront — no registration required to run the numbers.
Apply now →Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk