Interest rate calculator
Enter the loan amount, your monthly payment and the term to find the annual interest rate.
Interest rate calculator: find the rate from a payment
This interest rate calculator works out the annual interest rate of a loan when you already know the amount borrowed, the monthly payment and the term. It is the reverse of a loan payment calculator: instead of solving for the payment, it solves for the rate. Useful to check the real cost of a loan offer or a finance deal in the UK.
How it works
A fixed-payment loan follows the amortisation formula M = P × r(1 + r)n / ((1 + r)n − 1), where M is the monthly payment, P the principal, r the monthly rate and n the number of payments. There is no closed form to isolate r, so the calculator solves it numerically (bisection) and converts the monthly rate to an annual nominal rate by multiplying by 12.
Worked example
You borrow £15,000 and repay £304 a month over 5 years (60 payments). The calculator returns an annual rate of about 8%. Raise the payment and the implied rate drops; stretch the term and it rises.
Frequently asked questions
Is this the APR? It is the nominal annual rate implied by your payments. The APR also includes fees and charges, so the APR of a real offer can be higher.
Why does it show 0% or a dash? If the monthly payment is too low to even cover the principal split over the term, there is no positive rate that fits; increase the payment or shorten the term.
Does it work for car finance and mortgages? Yes, for any fixed-payment loan. For a full mortgage breakdown with taxes use the mortgage calculator.