Personal Loan Refund Calculator
If a bank lent you money you could not realistically afford to repay, the interest and charges you paid on that loan can be refunded. This page estimates what that could be worth, and explains where the argument usually lies.
Estimate your personal loan refund
Personal loan refund calculator
A rough estimate of the interest and charges an upheld personal loan complaint could refund.
| Interest and charges refunded | £0 |
| Ombudsman interest (4.75% simple) | £0 |
| Less basic-rate tax on the interest (20%) | £0 |
| Applied against what you still owe | £0 |
| Estimated cash to you | £0 |
A rough estimate only. It assumes the loan ran its full term at the rate you entered, and that the whole loan is found to have been unaffordable. If you settled early you paid less interest than this; if the lender topped the loan up or refinanced it more than once, the picture looks more like a sequence of loans and the complaint may only succeed from a point partway through.
You do not need a claims company. You can complain to the lender free of charge and, if you are not satisfied after eight weeks, escalate free to the Financial Ombudsman Service.
Check your loan with RecoupIn this guide
- When a personal loan becomes a claim
- What a successful refund includes
- A worked example
- Top-ups and refinances change the picture
- How this differs from other lending claims
- Frequently asked questions
When a personal loan becomes a claim
A personal loan is not unaffordable simply because it was expensive, or because repaying it was uncomfortable. The complaint turns on what the lender knew, or should have found out, before it lent.
Under CONC 5.2A of the FCA Handbook a lender must carry out a reasonable and proportionate creditworthiness assessment. Proportionate is the important word: the bigger the loan, the longer the term and the more strained your circumstances, the more the lender is expected to check. Relying on a credit score alone, or on income you stated without verification, is often not enough on a substantial loan.
The signs that tend to matter:
- You were already heavily indebted when the loan was approved, and a credit check would have shown it.
- The repayments left you nothing to live on once your existing commitments were accounted for.
- You were borrowing to repay other borrowing, which the pattern of your accounts would have revealed.
- You were in arrears, on a debt management plan, or had defaults at the time.
- The lender never asked about your outgoings, or accepted a figure that did not reflect reality.
The question is always the same: on what it knew or should have found out, was this lender being reasonable in believing you could repay this loan sustainably? Sustainably means without borrowing again and without going without essentials.
What a successful refund includes
A refund of the interest and charges you paid on the loan. You keep the amount you borrowed, because you had the use of it. What comes back is the cost of the borrowing.
Ombudsman interest on top, running from the date of each repayment to the date of settlement. For complaints referred from 1 January 2026 this tracks Bank of England base rate plus one percentage point, calculated as a weighted average across the period. Interest on your refund explained sets out which rate applies to you.
Basic-rate tax deducted from the interest element only. The lender takes 20% off that portion at source. The refund of the charges themselves is not taxed.
Correction of your credit file, removing markers linked to the unaffordable lending.
If you are still repaying, the refund is set against the outstanding balance first, and only the surplus reaches your account. That is still a real gain, because the debt reduces or disappears, but it is not cash in hand.
A worked example
A £5,000 loan over three years at around 23% APR, finished four years ago and fully repaid.
- Interest paid across the term: roughly £1,770.
- Ombudsman interest, averaged over the period the money was out of your hands: about £440.
- Less 20% tax on that interest: −£88.
- Estimated total: around £2,120, paid in cash because the loan is cleared.
The same loan with £2,000 still outstanding would clear that balance first and pay out roughly £120.
Top-ups and refinances change the picture
This is the most common complication, and the calculator above does not model it.
If the lender topped the loan up, refinanced it, or replaced it with a bigger one — particularly more than once — the complaint stops being about a single decision. It becomes a sequence, and the Ombudsman looks at the point in that sequence where continuing to lend stopped being reasonable. The early borrowing may be found to have been properly checked and is not refunded; the later borrowing is.
That is the same shape as a run of payday loans, and our payday loan refund calculator explains how the loan-by-loan approach works. If your loan was rolled forward two or three times, read that as well as this.
How this differs from other lending claims
Worth knowing, because the redress genuinely differs by product:
- Guarantor loans have a third party on the agreement. If the complaint succeeds the guarantor is released and may have a claim of their own, and because refunds usually offset a live balance, our guarantor loan checker deliberately gives a verdict rather than a figure.
- Payday and short-term loans are decided loan by loan across a sequence, not as one decision.
- Overdrafts turn on the repeat-use rules in CONC 5D — a pattern of being permanently overdrawn — rather than a single lending decision. See the overdraft refund calculator.
- Credit cards and catalogue accounts are harder again, because the balance revolves and any complaint about later credit limit increases has to apportion interest between the affordable and unaffordable parts of the balance.
A plain personal loan is the most straightforward of the five, which is why the figure above is more meaningful than it would be for the others.
Frequently asked questions
I do not have the paperwork. Can I still complain?
Yes. The lender holds the agreement and must locate it from your details — you are not required to produce account numbers or statements. Our free complaint letter says so explicitly.
I repaid the loan without ever missing a payment. Does that count against me?
No, and this stops a lot of people complaining who should. Many borrowers prioritise the loan and fall behind elsewhere, or borrow again to cover it. The question is whether the lending was affordable, not whether it was repaid.
How far back can I go?
Generally within six years of the lending, or three years from when you reasonably became aware there was a problem, and the Ombudsman can consider older cases in some circumstances. It costs nothing to ask.
What if the loan was from a bank I still use?
It makes no difference to the complaint. Banks handle affordability complaints through the same process regardless of whether you remain a customer.
Do I need a claims company?
No. You can complain to the lender yourself free of charge, and escalate free to the Financial Ombudsman Service if you are not satisfied after eight weeks. Our free letter tool will write it for you.
Related guides
- Personal loans and unaffordable lending
- How redress is calculated
- Free complaint letter generator
- Escalating to the Financial Ombudsman
More calculators
Free tools that estimate what a claim could be worth — a starting point, not a valuation.
