Insights 3min(s)

Are loan calculators accurate? Why Shawbrook doesn't use them

Unlike most lenders, we don’t offer a loan calculator on our website. This is because at Shawbrook, we believe that loan calculators don’t accurately reflect what interest rate you will get when you apply for the loan.

Back in 2018, we conducted our own research report on Representative APRs and how lenders use them. Not surprisingly, we found that attaining the lowest interest rate is one of the most important factors for people looking to choose a personal loan provider. Before an individual applies for a loan with a provider they can use a tool that most lenders offer called a loan calculator. This shows what their repayments could look like if they chose to borrow with that specific lender.

What you may not be fully aware of is that this might not be the actual rate you’ll receive so it doesn’t really give a clear picture of the rate you’ll get and the associated repayments until you have applied. 

In this guide, we explain what loan calculators are, how they are used by other loan providers to entice users to get a quote, and why Shawbrook doesn’t use them.


What are loan calculators?

A loan calculator is a tool most lenders offer on their website so that people can work out how much money they will have to pay back if they borrow money from them.

To calculate the repayments, you enter the amount of money you want to borrow and the amount of time you want to borrow it for. Using their Representative APR or interest rate, the calculator will show you the amount you will have to pay back each month.

However, not everyone will be offered the loan with the Representative APR. This means that a substantial amount of people may be offered a rate that could be higher than the Representative APR and therefore, loan repayments will be higher than the loan calculator suggests making the cost of borrowing more expensive.

What does Representative APR mean?

APR is the annual percentage rate of a loan - this is the amount of interest added to the total amount you owe each year (including any other associated fees). It’s worked out on a yearly basis but is paid each month as part of your regular repayments.

The Representative APR is an indicative rate used for advertising and loan calculators. However, this is the rate that at least 51% of applicants will receive.

Up to 49% of applicants can therefore end up getting a rate (the actual amount of interest you pay) that is higher or in some cases lower, than their advertised Representative APR. 

It’s essential that you pay close attention to the APR you are being offered before accepting a loan as this can vary greatly from the Representative APR.

Are loan calculators accurate?

Because loan calculators are based on the assumption that you are accepted for the Representative APR, they may not be accurate for potentially 49% of applicants.

They are typically used by lenders as a marketing tactic to encourage people to apply. You should never rely on them as an accurate way of understanding how much you will end up paying.

Our research found that there can be a significant discrepancy between the Representative APR advertised and the actual APR people are offered on loans.

The actual rate given on a personal loan will vary from person to person. And this is why Representative APR - and the loan calculators that use this - can be misleading.


Why don’t we have loan calculators on our loan pages?

We don’t have a loan calculator on the Shawbrook website because we don’t believe it’s a fair representation of the rate you may receive. As we’ve pointed out, most calculators are based on a loan provider’s Representative APR and this may not reflect the rate you will receive once you apply for a loan.

Instead, we offer personalised quotes with guaranteed rates. If you apply for a quote, you will receive a full breakdown of your repayment costs based on the actual APR that you are eligible for. And don’t worry, receiving a quote will not affect your score.

If you’re considering taking out a loan and want to know what your actual APR will be, apply for a personalised, instant quote with Shawbrook.


All loans are subject to status. The interest rate offered will vary depending on our assessment of your financial circumstances and your chosen loan amount. Terms and conditions apply.