UK Family Loan Calculator for Friends and Family

Enter the amount, annual interest rate, repayment term and payment frequency. Chipkie calculates the payment for each period, number of payments, total interest, total repaid and projected finish date using a reducing-balance schedule.

A private family loan can be agreed without interest in many ordinary circumstances, and Chipkie supports a 0% rate. A zero-interest arrangement should still state the amount, repayment expectations and what happens if circumstances change. Get advice where the amount, purpose or structure makes the arrangement significant or unusual.

The UK does not use the US Applicable Federal Rate system for ordinary private family loans. There is no general AFR-style rate that this calculator requires you to charge. That does not mean every interest-free arrangement has the same tax, estate, mortgage or legal consequences.

Interest received on a private loan is generally taxable interest income for the lender. HMRC identifies interest on loans made privately to individuals or companies as interest within the Income Tax rules. Whether tax is payable depends on the lender’s total income, allowances and circumstances.

It may. For 2026/27, the allowance is £1,000 for a basic-rate taxpayer and £500 for a higher-rate taxpayer; additional-rate taxpayers receive no Personal Savings Allowance. The allowance applies across qualifying savings income, so bank interest and other interest may use some or all of it.

MoneyHelper recommends recording how much will be repaid and when, and keeping repayment records. A written agreement can also cover the interest rate, early repayment, missed payments and how changes will be agreed. For a substantial or secured loan, ask a solicitor whether a more formal agreement is appropriate.

A loan creates an expectation that the money will be repaid; a gift does not. The wording, conduct of both people and actual repayments can all be relevant. Record the intention before transferring the money and do not describe a repayable loan as a gift to a mortgage lender or another third party.

It can. If a lender dies while money remains outstanding, HMRC treats personal loans owed to the deceased as debts due to the estate and asks for their value and supporting evidence. Forgiving or releasing a loan may have different consequences, so estate-planning advice can be important.

Potentially, but the borrower should disclose the arrangement to the mortgage lender, broker and conveyancer. Mortgage applications commonly require evidence of the deposit and distinguish between money given as a gift and money that must be repaid. A family repayment may also affect mortgage affordability.

Yes. Chipkie supports monthly, fortnightly and weekly repayment schedules. Changing the frequency recalculates the schedule rather than simply dividing a monthly figure, helping the calculator remain consistent with Chipkie’s loan setup.

Yes. The early-payment control estimates how an additional amount on each payment could shorten the schedule and reduce interest. It is a projection only; any right or obligation to make extra payments should be recorded in the agreement.

No. It is an informational planning tool. Tax treatment, enforceability, mortgage requirements and FCA regulation depend on the facts. FCA authorisation questions are particularly relevant where lending is carried on by way of business; anyone lending repeatedly or commercially should obtain appropriate advice.