Loan Calculator Nigeria — Monthly Payment & Amortization Schedule
Calculate monthly loan repayments, total interest and full amortization schedule for any Nigerian bank loan. Supports any amount, rate and tenure.
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Interest as % of Loan
Amortization Schedule — First 12 Months
| Month | Payment | Principal | Interest | Balance |
|---|
How Loan Amortization Works
With an amortizing loan, each monthly payment stays the same, but the split between principal and interest changes over time. Early payments are mostly interest; later payments are mostly principal.
Formula: M = P × [r(1+r)&sup n;] / [(1+r)&sup n; − 1]
Where P = principal, r = monthly rate (annual ÷ 12), n = number of months.
Frequently Asked Questions
What are typical loan interest rates in Nigeria?
Nigerian commercial bank loan rates typically range from 20% to 30% per annum. The Central Bank of Nigeria (CBN) Monetary Policy Rate (MPR) influences these rates. Microfinance banks charge higher rates (30–60%), while the Bank of Industry (BOI) offers subsidised rates from 9% for qualifying SMEs.
How is monthly loan repayment calculated?
The standard formula uses the reducing balance (amortization) method: M = P × [r(1+r)^n] / [(1+r)^n - 1], where P is principal, r is monthly interest rate (annual rate ÷ 12), and n is number of months. Each payment covers interest first, then reduces principal.
What is the difference between flat rate and reducing balance?
A flat rate applies interest on the original loan amount throughout the tenure. A reducing balance rate applies interest only on the outstanding principal — which decreases as you repay. Reducing balance is always cheaper. Most Nigerian banks advertise flat rates; this calculator uses reducing balance (the correct method).
Can I pay off a loan early in Nigeria?
Most Nigerian banks allow early repayment, but some charge a prepayment penalty (typically 1–3% of outstanding balance). Check your loan agreement before making lump sum payments. Early repayment significantly reduces total interest paid.
What is a good debt-to-income ratio in Nigeria?
Financial advisors recommend that total monthly loan repayments should not exceed 30–35% of your monthly net income. Nigerian banks typically apply this threshold when assessing loan applications. If your total repayments exceed 40% of net income, consider reducing the loan amount or extending the tenure.