You have money available and you want to know whether settling your personal loan early saves enough to justify the early repayment charge. The answer depends on a specific calculation: how much interest remains over the rest of the term, minus the fee the lender charges for early settlement. If the interest saved exceeds the fee, settling early saves money. If the fee exceeds the interest, it does not.
This calculator runs that calculation. It estimates the outstanding balance based on the original loan details and how many months have been paid, then shows the remaining interest, the early repayment charge, and the net saving or net cost. The ERC automatically adjusts to the correct statutory cap based on the remaining term. All figures are approximate. The exact settlement figure must be requested from the lender, who is required to provide it within seven working days. This tool is for informational purposes and does not constitute financial advice.
At a Glance
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The calculator estimates the outstanding balance, remaining interest, settlement fee, and net saving from your original loan details and months paid. The figures are approximate.
Because the tool works from the original loan parameters rather than a live lender feed, the balance is calculated using the standard amortisation formula. It will be very close to the actual balance for fixed-rate loans with no overpayments or missed payments. If overpayments have been made, the actual balance will be lower. Request the exact settlement figure from the lender before committing to early repayment.
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The ERC automatically adjusts: 1% if more than 12 months remain, 0.5% if 12 months or fewer. These are the statutory maximums under the Consumer Credit Act.
When the months-paid slider is moved, the calculator checks how many months remain. If more than 12, the ERC defaults to 1%. If 12 or fewer, it switches to 0.5%. The slider can be overridden if your lender charges less than the cap or nothing at all. The charge also cannot exceed the remaining interest, which the calculator applies automatically.
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The calculator flags when early settlement is not worth it. Near the end of the term, the remaining interest may be too small for the saving to justify the fee.
If the net saving is negative or very small (under £50), the verdict text explains why: the remaining interest is close to or less than the settlement fee, and running the loan to its natural end costs the same or less than settling early. This is a normal outcome for loans in their final three to six months and is not a sign that anything is wrong.
Early Repayment Saving Calculator
Enter your original loan details and how many months you have paid. The calculator estimates the outstanding balance and shows whether settling early saves money. All figures are approximate.
33% of term completed
Your loan now
Approx. outstanding balance
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Monthly payment
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If you keep paying to the end
Total remaining payments
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Remaining interest
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Net saving
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Approximate settlement figure
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Request the exact figure from your lender. It is valid for 28 days.
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About this calculator
Whether a bonus, inheritance, savings, or returned deposit has created the opportunity, this tool shows whether using the money to settle the loan saves more than it costs in fees.
Estimates the outstanding balance, the remaining interest, and the early repayment charge. The net result (interest saved minus fee) is the figure that answers the question.
The ERC slider auto-adjusts to 1% or 0.5% based on remaining term, matching the Consumer Credit Act caps. It also applies the statutory rule that the charge cannot exceed the remaining interest.
The balance is calculated from original loan parameters. The exact settlement figure must come from the lender, who is required to provide it within seven working days of request. The figure is valid for 28 days.
How to use this calculator
Set the original loan amount, APR, and term. These should match the loan agreement. If the original amount is not to hand, check a previous statement or the loan confirmation email.
Move the slider to the number of monthly payments made so far. The progress bar shows how far through the term you are. The ERC rate auto-adjusts based on remaining months.
The default is the statutory maximum (1% or 0.5%). If your lender charges less, or nothing, adjust the slider down. Check the loan agreement or contact the lender to confirm the specific charge.
If the net saving is positive, settling early saves money. The approximate settlement figure gives a ballpark. Contact the lender and request the official figure before making the payment. The guide to how to repay early covers the full settlement process.
The statutory ERC caps
The Consumer Credit Act sets the maximum amount a lender can charge for early repayment. If more than 12 months remain on the loan, the maximum is 1% of the amount repaid early. If 12 months or fewer remain, the maximum is 0.5%. In both cases, the charge cannot exceed the total interest that would have been payable over the remaining term.
This third condition, the interest cap, is particularly relevant near the end of a loan. If the outstanding balance is £2,000 and the remaining interest over the final four months would be £20, the early repayment charge is capped at £20, not £10 (which would be 0.5% of £2,000). The calculator applies this cap automatically. When it activates, the fee line shows the capped amount with a note explaining that the percentage calculation would have produced a higher figure.
Many lenders charge less than the statutory maximum. Some charge a flat fee. Others charge nothing at all. The statutory caps are ceilings, not standard rates. The guide to personal loans and your consumer rights covers the full set of statutory rights including early repayment, and the guide to how to repay a personal loan early covers the settlement process step by step.
When early settlement is not worth it
Early settlement saves money for most of the loan term, but the saving shrinks as the end of the term approaches. This is because the remaining interest decreases with every payment (the balance is getting smaller), while the settlement fee, calculated as a percentage of the outstanding balance, stays proportionate to what is left.
In the final three to six months, the remaining interest may be only £20 to £50, and the settlement fee may be £10 to £25. The net saving is small, sometimes zero, and occasionally negative (the fee exceeds the remaining interest, though the statutory cap prevents the fee from exceeding the interest). The calculator flags this: when the net saving is marginal or negative, the verdict text explains that running the loan to its natural end costs the same or less than settling early.
This is not a sign that the lender is being unfair. It is the mathematical consequence of settling a loan that is almost fully repaid. The interest earned by the lender in the final months is small, and the settlement fee, even at 0.5%, can approach or match it. The practical decision is whether the small saving justifies the administrative effort of requesting a settlement figure, making the payment, and confirming closure. For loans with six months or more remaining, early settlement almost always saves money. For loans in the final two to three months, it usually does not.
Related tools
If you are settling to refinance at a lower rate rather than paying off, this tool shows the net saving after the fee and the new loan cost.
If you are settling and taking a smaller replacement loan for the remaining need, model the new loan here.
The right to repay early, the statutory ERC caps, and the settlement figure process are covered in full.
Looking for more loan resources?
Guides and tools covering secured loans, debt consolidation, and home improvementsFrequently asked questions
Why is the balance approximate?
The calculator estimates the outstanding balance using the standard amortisation formula, which assumes every monthly payment has been made on time and no overpayments have been made. For a fixed-rate loan with a perfect payment history, this estimate is very close to the actual balance. If any payments were missed (resulting in accrued interest and charges) or if overpayments were made (reducing the balance faster), the actual balance will differ.
The approximate figure is useful for deciding whether early settlement is worth pursuing. The exact figure comes from the lender’s settlement statement, which accounts for the actual payment history, any accrued interest since the last payment, and the specific early repayment charge. Request this before making the settlement payment.
What if my lender charges no early repayment fee?
If the lender charges no fee (which is the case for some mainstream personal loans), set the ERC slider to 0%. With no fee, the net saving equals the full remaining interest, and settling early is beneficial at any point in the term. The only cost is the loss of the remaining interest income that the lender would have earned, which is not a cost to the borrower.
Even with no fee, settling very close to the end of the term produces a small saving in absolute terms because the remaining interest is small. The decision at that point is whether the saving (which might be £10 to £30 in the final month or two) justifies the effort of arranging the settlement. For most borrowers, it does not, and letting the final few payments run naturally is simpler.
Can I make a partial overpayment instead of full settlement?
Yes. The right to repay early under the Consumer Credit Act covers both full settlement and partial overpayment. A partial overpayment reduces the outstanding balance and the interest charged on it going forward. The early repayment charge on a partial overpayment is calculated on the amount overpaid, not the full balance. If you have £3,000 available but the settlement figure is £6,000, a partial overpayment of £3,000 reduces the balance, shortens the remaining term or lowers the remaining payments, and saves interest.
This calculator models full settlement. To see the effect of a partial overpayment, enter the amount you would overpay as if it were the remaining balance in the repayment calculator at the remaining APR and term to see the monthly payment reduction, or contact the lender to ask how the overpayment would be applied.
How do I request the exact settlement figure?
Contact the lender by phone, online banking, or in writing and request an early settlement figure. The lender is legally required to provide this within seven working days. The figure includes the outstanding balance, any accrued interest since the last payment, and the early repayment charge (if applicable). It is valid for 28 days. If payment is not made within 28 days, a new figure must be requested because interest continues to accrue daily.
Some lenders display the settlement figure within the online banking or app interface, updated daily, which avoids the need to contact the lender at all. If this is available, it provides the most current figure. Once you have the exact figure, compare it against the approximate figure from this calculator. If the figures are broadly similar, the calculation is reliable. If they differ significantly, the lender’s figure takes precedence.
Does the ERC cap really mean the fee cannot exceed the remaining interest?
Yes. This is a statutory requirement under the Consumer Credit Act. The early repayment charge cannot exceed the total amount of interest that would have been payable over the remaining term of the loan. In practice, this cap rarely activates during most of the loan term because the remaining interest is much larger than 1% of the balance. It becomes relevant in the final months, when the remaining interest shrinks to a small amount. The calculator applies this cap automatically and shows when it has activated.
This cap exists to prevent the fee from costing more than the interest it is replacing. Without it, a borrower settling a loan in the final month could pay a fee that exceeds the interest they would have paid by letting the loan run to its natural end. The cap ensures that early settlement is never more expensive than staying, provided the lender charges at or below the statutory maximum.
Squaring Up
The early repayment saving calculator answers a single question: does the interest saved by settling now exceed the early repayment charge? For loans with more than a few months remaining, the answer is almost always yes. For loans in their final months, the saving may be marginal or zero. The ERC auto-adjusts to the statutory cap (1% or 0.5%) based on remaining term and cannot exceed the remaining interest. The figures are approximate. The exact settlement figure must come from the lender, who is required to provide it within seven working days.
Explore all loan guides and tools
Everything in one place, across secured loans, debt consolidation, and home improvementsThis calculator is for illustrative purposes only and does not constitute financial advice. The outstanding balance is an estimate based on the original loan parameters and assumes all payments were made on time with no overpayments. The exact settlement figure must be obtained from the lender. Early repayment charge caps are set by the Consumer Credit Act and are stated accurately. The rate and terms of any loan depend on the borrower’s credit profile, income, and the lender’s own criteria. Missed repayments can affect your credit rating and may result in further action.
