Borrowing, savings and interest calculations: comparing scenarios clearly

Keep rates and periods consistent

Check whether the quoted rate is annual, monthly, fixed or variable, and whether fees are included. A repayment estimate should use the same term, payment frequency and balance that apply to the actual product. For savings, check access restrictions, introductory rates, tax treatment and whether interest is paid monthly or annually.

The FCA consumer credit guidance and a provider’s own terms are important references for borrowing decisions.

A practical approach

For borrowing, compare the scheduled payment with one or two overpayment scenarios. Do not assume an overpayment is accepted without checking the agreement, early-repayment charge and product terms. For debt, list balances, rates and minimum payments before modelling a payoff order.

For savings, test a range of realistic rates rather than one optimistic return. Where a product allows withdrawals or variable rates, a simple compound-interest output is a comparison point, not a guarantee.

Sources and limits

CalculatorHQ does not recommend credit products or assess affordability. If repayments are difficult or you are considering new credit, use free, regulated or charitable debt-advice services and the product provider’s official information.