How the saving is worked out
The calculator works out the payment and total interest on the loan you have now and on the new one, for the same balance, at monthly rates from each APR (FCA CONC App 1.2). The saving is the interest you avoid, less the early repayment charge and any arrangement fee.
Worked example
You owe £10,000 at 12% APR with 48 months left: £260.34 a month and £2,496.15 of interest still to pay. A new 48-month loan at 7% APR costs £238.47 a month and £1,446.37 of interest. After a £100 early repayment charge you save £949.78, and the lower payments earn back the charge in 5 months.
Watch the term
A longer new loan cuts the monthly payment but can cost more interest overall. The calculator only shows a payback month when switching saves money within the new term.
Early repayment charges
On regulated UK consumer loans you can always repay early. If the rate is fixed and you repay more than £8,000 in a 12-month period, the lender can ask for compensation of up to 1% of the amount repaid (0.5% with a year or less left), but never more than the interest you would have paid. The 2004 Early Settlement Regulations set the rebate of future interest. Ask your lender for a settlement figure.
To estimate the settlement figure, use the UK early repayment calculator .
Borrowing in the US?
The country choices above the inputs open separate local pages. US lenders show an APR too, but the US page uses the loan's note rate, and refinancing costs are usually an origination fee or other upfront fees. Choosing United States opens that page and resets the inputs; amounts are not converted.
For the US version, use the US loan refinance calculator in US dollars.
Inputs for the UK loan replacement calculator
Balance left on your loan
What you still owe, in pounds.
Current APR
The APR on your loan now.
Months left
How many repayments you still have to make.
New APR
The APR on the replacement loan.
New loan term
How many months the new loan would run.
Early repayment charge
Your current lender's charge for settling early.
New loan arrangement fee
Any fee the new lender charges.
CALCULATOR QUESTIONS
UK loan replacement calculator questions
Is it worth refinancing a loan?
If the interest you save is more than the early repayment charge and fees, and you don't stretch the term much, usually yes.
How much is the early repayment charge on a UK loan?
On a fixed-rate regulated consumer loan, only if you repay more than £8,000 in a 12-month period, and then at most 1% of the amount repaid (0.5% with a year or less left), and no more than the interest you would have paid.
Does a longer term save money?
It lowers the payment, but you pay interest for longer, so it often costs more.
Will switching affect my credit score?
The new application adds a search, and closing the old loan changes your file. The effect is usually small.