Loan Calculator (For Loan app and Bank in Nigeria)

Loan Calculator (Nigeria)

Loan Amount (₦): Interest Rate (% per month): Loan Term (months): Choose Calculation Method:

When it comes to borrowing money in Nigeria, loan calculators are one of the best tools you should use before taking a loan. You can use this loan app calculator when you want to borrow money from a loan app like FairMoney, Carbon, Renmoney, Okash, Easemoni Moniepoint, e.t.c. It is also useful for commercial bank loans. This loan calculator allow you to know your actual repayment amount and interest amount, which is very crucial.

Our free Nigerian Loan Calculator allows you to calculate both flat rate loans used by mobile lending apps and reducing balance loans used by Nigerian banks. Here you will also learn the key differences between the two methods, how to calculate loan repayments by yourself, and tips for managing your debt responsibly in 2025.

Why Use a Loan Calculator in Nigeria?

This loan calculator will help you to determine exactly:

How much you will repay monthly.
See the total repayment amount across the loan period.
How much interest you are paying in total.
See whether you can realistically afford the loan.

Most people will rush to borrow money without checking the interest and the repayment amount, only to be shocked when the debt balloons with interest. This loan calculator prevents this mistake by giving you a clear financial picture before you commit.

For example:

If you borrow ₦50,000 at 10% monthly interest for 3 months, you may think it is affordable.
With our calculator, you will see that with the loan app (Flat Rate), you will repay the sum of ₦65,000 in total. While on a bank loan (reducing balance), you will pay ₦55,000.
That’s a ₦10,000 difference simply because of the method used!

This shows why using this calculator is critical.

Loan app vs. Bank Calculator

In Nigeria, there are two common methods lenders use to calculate repayments:

1. Loan App Calculator (Flat Rate Method)

Loan apps in Nigeria use flat rate method to calculate their loans. In a flat rate calculation:

Interest is charged on the original loan amount (principal) for the entire duration.
The monthly repayment is simply:

(Principal + Total Interest) ÷ Loan Tenor

Example: If you borrow ₦100,000 at 10% per month for 6 months.
- Interest = ₦100,000 × 10% × 6 = ₦60,000
- Total Repayment = ₦160,000
- Monthly Repayment = ₦26,667

This method is simple but expensive, because interest is not reduced even as you repay part of the loan.

2. Bank Calculator (Reducing Balance Method)

Reducing balance calculator is used by banks like GTBank, Zenith, Access, and First Bank.

Interest is charged on the remaining balance after each repayment.
As the balance reduces, the interest also reduces.
The formula is:

EMI = [P × r × (1 + r)^n] ÷ [(1 + r)^n – 1]

Where:

P = Loan Amount
r = Monthly Interest Rate
n = Number of Months
Example: Borrow ₦100,000 at 10% per month for 6 months.
- Monthly Repayment ≈ ₦22,244
- Total Repayment ≈ ₦133,464
- Total Interest ≈ ₦33,464

Clearly, the reducing balance method is cheaper for borrowers.

Free Loan Calculator

We have created a loan calculator that allows you to instantly calculate your loan interest rate and repayment amount for loan apps and bank loans.

This calculator works well on any device and can help you to calculate loan interest and repayment. It can also help you to see the difference between loan apps and bank loans.

Example of Calculations with the Loan Calculator

Here are some examples to show how the calculator works:

Example 1: ₦50,000 loan at 8% per month for 3 months

Loan app:
- Total Interest = ₦12,000
- Total Repayment = ₦62,000
- Monthly = ₦20,667
Bank:
- Total Interest ≈ ₦6,463
- Total Repayment ≈ ₦56,463
- Monthly ≈ ₦18,821

Difference: You can save almost ₦5,500 with the bank.

Example 2: ₦200,000 loan at 5% per month for 12 months

Loan apps:
- Interest = ₦120,000
- Total Repayment = ₦320,000
- Monthly = ₦26,667
Bank loans:
- Interest ≈ ₦66,213
- Total Repayment ≈ ₦266,213
- Monthly ≈ ₦22,184

Difference: With banks, you pay ₦53,787 less.

Which Loan Method Do Nigerian Loan Apps Use?

Most loan apps in Nigeria, such as

FairMoney
Carbon (Paylater)
Branch
PalmCredit
Okash (Opay)
Renmoney
Aella Credit
QuickCheck
Migo
KiaKia
Kuda Overdraft
ALAT by Wema
GTWorld QuickCredit
Access QuickBucks
EaseMoni
Page Financials
Zedvance
Specta
CredPal
Umba

Use the Flat Rate method. That is why their interest charges are higher than banks.

Banks, however, use the reducing balance method, but they also require paperwork, collateral, or guarantors.

So while loan apps are fast and convenient, they are costlier compared to banks.

Benefits of Using the Loan Calculator

By using this calculator, you can:

See Clarity on repayments—no surprises at the end of the loan.
See the difference between loan apps and bank loans—See how much loan apps vs. banks really cost.
See Better financial planning – Decide if you can handle the monthly repayment before applying.
Negotiation power—If a lender offers a loan, you can calculate and check if it’s fair.
Debt avoidance—Helps avoid taking loans that are beyond your repayment ability.

Tips Before Taking Any Loan in Nigeria

Check the true cost—always calculate using flat rate vs. reducing balance.
Borrow only what you need—small loans are easier to repay.
Understand repayment terms—Some apps give only 7–30 days despite advertising 90 days.
Avoid rollovers—Extending loans means more interest.
Prioritize early repayment—Paying early saves you from debt accumulation.

Conclusion

With this loan calculator, you can instantly calculate loan interest and repayment amount. See the difference between loan apps and bank loans. This loan calculator will help you to make a smart borrowing decision.