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Car Loan Repayment Calculator
See exactly what you'll pay each month, how much goes to interest vs principal, and what early settlement would save you.
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Total Amount Payable
£29,386.98
This is the total that leaves your account — deposit + all payments + balloon
Representative Example
Early repayment almost always saves you money.
On a £15,000 loan at 6.9% over 48 months, settling 12 months early saves approximately £500 in interest. The lender can charge a maximum of 58 days' interest as an early settlement fee — usually far less than the interest you save.
How car loan repayment works
Whether you have HP, a personal loan, or a dealer finance agreement, the maths is the same: each monthly payment is split between interest and principal. Early in the term, more of your payment goes to interest. As the balance reduces, more goes to principal.
This is called amortisation. It means the first year of payments is the most expensive in interest terms — settling early in the agreement saves proportionally more than settling near the end.
Early settlement: your rights
Under the Consumer Credit Act 1974 (sections 94-97), you have a statutory right to repay any regulated credit agreement early. The process:
- Request a settlement figure — write to the lender or call. They must respond within 12 working days.
- Review the figure — it will show the outstanding balance, minus a rebate of future interest, plus any early settlement fee (max 58 days' interest).
- Pay it — once paid, the agreement ends and (for HP) ownership transfers to you.
Partial early repayment
You don't have to settle in full. Most agreements allow partial overpayments that reduce the outstanding balance and therefore future interest. Some lenders let you overpay monthly; others require a lump sum. Check your agreement terms.
Even small overpayments help. Adding £50/month to a £300/month payment on a 48-month £15,000 loan at 6.9% saves approximately £350 in total interest and pays off the loan 6 months early.
PCP early settlement is different
With PCP, early settlement means paying off the remaining monthly balance plus the balloon payment. This can be a large amount — often more than the car is currently worth (negative equity). Before settling PCP early, compare the settlement figure against the car's current market value.
If you're in positive equity (car worth more than settlement figure), you can sell privately and pocket the difference. If you're in negative equity, you'll need to cover the shortfall from savings or roll it into a new agreement.
Voluntary Termination vs early settlement
These are different things. Early settlement means paying off the remaining balance in full. Voluntary Termination (VT) means handing the car back once you've paid 50% of the Total Amount Payable — you pay nothing more, but you don't keep the car.
VT is available on HP and PCP (not personal loans, which are unsecured). It's a consumer right under Section 99 of the Consumer Credit Act. If you can't afford to continue but have passed the 50% mark, VT may be the better option.