Loan Repayment Calculator
Loan Repayment Calculator
Monthly repayment, total interest and the full amortization schedule.
Enter amount, rate and duration.
How it works
Nigerian banks typically use the reducing-balance method: interest is charged only on the outstanding balance each month, so as you pay down the principal, the interest portion of your payment shrinks and the principal portion grows. Many loan apps instead use a flat rate: interest is calculated on the full original amount for the entire tenure, which usually works out more expensive for the same quoted rate.
Worked example (reducing balance): a ₦500,000 loan at 28% per year over 12 months works out to a monthly interest rate of 28% ÷ 12 ≈ 2.33%. Using the standard amortization formula, your monthly repayment comes to roughly ₦48,600, for a total repayment of about ₦583,200 — meaning ₦83,200 in interest over the year.
Switch the interest method toggle to compare — the same 28% flat rate on the same loan would charge interest on the full ₦500,000 every month regardless of how much you've repaid, pushing the total interest noticeably higher than the reducing balance method for an identical quoted rate.
Frequently asked questions
What's the difference between reducing balance and flat rate?
Reducing balance charges interest only on what you still owe, so interest falls each month as you repay. Flat rate charges interest on the original loan amount for the whole tenure, so you pay more interest overall even at the same headline rate.
Which method do Nigerian banks and lenders use?
Commercial banks typically use reducing balance. Many microfinance banks, cooperatives and loan apps use flat rate — always ask your lender which method applies before comparing offers by their advertised rate alone.
Does this include fees, insurance or charges?
No — this calculates pure interest and principal only. Many lenders add processing fees, insurance premiums or management charges on top, so your actual repayment may be higher than shown here.
Can I see how much I'd pay each month?
Yes — expand "View amortization schedule" under your result to see a month-by-month breakdown of payment, interest, principal and remaining balance.