Estimate how loan overpayments could affect payoff time, interest cost, and monthly budget impact.
Overpaying a personal loan cuts the balance that interest is charged on, which shortens the term and reduces the total interest paid. Personal loans differ from mortgages in one respect worth knowing: under the Consumer Credit Act you have the right to settle early, but the lender may add a set period of extra interest to the settlement figure, so the actual saving is a little smaller than the raw interest calculation suggests.
| Tax/source year | 2026/27 |
|---|---|
| Region | England/Wales/Northern Ireland |
| Tax code basis | 1257L where the page uses PAYE defaults |
| Pension basis | No pension deduction unless this example says otherwise |
| Student loan basis | No student loan unless selected in this example |
| What is not decided here | PayBreakdown does not decide payroll correctness, lender approval, benefit entitlement or employer compliance, and does not give regulated financial, mortgage, debt, tax, payroll or legal advice. |
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A personal loan gives you two distinct rights, and lenders handle them differently. A partial overpayment reduces the balance, and the lender must apply it and reduce the interest accordingly — typically by shortening the loan, since personal-loan payments are usually fixed. Settling in full means asking for a settlement figure: the outstanding balance plus any interest the lender is allowed to add for the settlement period, quoted in writing and valid for a stated window. The settlement figure is the real price of finishing early — always ask for it rather than estimating from the balance on the app, because the two are rarely the same number.
The arithmetic favours overpaying the most expensive borrowing first, and a personal loan is often not it.
Interest rate, term, fees, deposit and the credit commitments you already have all move the result, and a lender applies its own affordability policy and credit checks on top. Treat the number as a way to see whether a repayment looks comfortable or stretched, not as an offer — and read it against your real bills, savings and any income change you expect. See how each deduction is worked out.
No. It is an estimate worked from published HMRC and GOV.UK figures for the current tax year, using the assumptions shown on this page. It cannot see your tax code history, benefits in kind or employer payroll rules, so check important decisions against your payslip, official guidance or a qualified adviser.
Yes. Open the linked calculator to change the salary, pension, tax code, region or student loan plan and the figures update as you type.
Last updated 2026-08-28. Checked by Sean Elsmore. Rates last checked against GOV.UK on 2026-08-07. Estimates are for planning and should be checked against official records where the decision matters.