Loan Calculator Nigeria, NGN Repayment and True Rate

This loan calculator helps you estimate your monthly repayment in Nigerian naira for a personal, car, or business loan. It shows the monthly amount, the total interest, and a full schedule, and it supports both reducing balance and flat rate methods. Loan rates in Nigeria can be high and vary a lot between banks, fintech apps, and other lenders, so the most important thing is to compare the true cost. This page is part of our loan calculators by country.

How to use the Nigeria loan calculator

The currency is set to NGN. You can switch it if you need another currency.
Enter the loan amount in naira.
Enter the rate the lender quoted and the term in years.
Read your results: the monthly repayment, the total interest, and a year by year schedule.

How loan repayments work in Nigeria

Most bank loans in Nigeria use a reducing balance method, where interest each month is charged on the balance you still owe, so it falls as you repay. The monthly repayment uses the standard formula:

Payment = P × r × (1 + r)ⁿ / ((1 + r)ⁿ − 1)

Here P is the loan amount, r is the monthly interest rate, and n is the number of months.

Worked example: Borrow NGN 2,000,000 at a 25% yearly rate for 3 years. The monthly repayment is about NGN 79,520, and the total interest is about NGN 862,707. Rates in Nigeria move with the Central Bank policy rate and differ widely by lender, so use the rate you are actually offered.

Watch the true cost: flat rates and app loans

This is where many borrowers in Nigeria pay far too much. Some lenders, especially digital and fintech apps and some asset finance, quote a flat rate or a flat monthly fee, which is charged on the full original amount. A small looking monthly fee can work out to a very high yearly rate.

For example, a 5% flat rate is close to about a 9.8% reducing balance rate over 5 years, and short term app loans can be far more expensive than that. Before you borrow, always work out the effective yearly rate with our effective interest rate calculator, and compare flat against reducing using the flat rate and reducing balance tools.

Fixed vs variable rates

The Central Bank of Nigeria (CBN) sets a policy rate that influences what lenders charge. Some loans have a fixed rate for the term, while others can change if the policy rate moves. Because rates in Nigeria have often been high, check whether your rate is fixed or variable, and if it can change, run this calculator at a higher rate to see the worst case.

Common loan types in Nigeria

Bank personal loan: often a salary backed loan with a set term and reducing balance interest.
Fintech or app loan: fast and easy, but can be very expensive, so always check the effective rate.
Car or asset finance: needs a deposit and may be quoted at a flat rate.
Business or SME loan: based on the business, often needing collateral or a guarantor.
Mortgage: commercial mortgages are costly and short, while the National Housing Fund offers longer, cheaper home loans to contributors.

Non-interest, Islamic banking is also available in Nigeria for those who prefer it. Expect processing fees, and possibly insurance or a guarantor.

Reducing balance vs flat rate

At the same number, a reducing balance rate is always cheaper than a flat rate, because interest is charged only on what you still owe. Many Nigerian banks use reducing balance, but app and asset lenders may use flat. Always convert a flat rate before comparing, using the tools above, so you can see the real difference.

Tips for borrowers in Nigeria

Compare the effective yearly rate, not a flat or monthly number.
Be careful with app loans, which can carry very high effective rates and fees.
Borrow from licensed lenders regulated by the CBN.
Count every fee, including processing and insurance, in the true cost.
Keep repayments affordable against your income, and check early settlement rules.

Related tools and other countries

Plan a specific loan with our car loan, personal loan, business loan, or mortgage calculators, or build a full amortization schedule. Borrowing elsewhere? Try:

United Kingdom (GBP) · India (INR) · Pakistan (PKR) · UAE (AED) · Saudi Arabia (SAR) · All countries

FAQ – Loan Calculator Nigeria

Frequently asked questions

How is loan repayment calculated in Nigeria?

Most banks use a reducing balance method. The payment is P × r × (1 + r)ⁿ / ((1 + r)ⁿ − 1), where P is the loan amount, r is the monthly interest rate, and n is the number of months. Interest each month is charged on the balance you still owe.

Why are some loan rates in Nigeria so high?

Rates follow the Central Bank policy rate, which has often been high, and they vary widely by lender. App and short term loans can be especially expensive, so always check the effective yearly rate before borrowing.

What is the difference between a flat and reducing rate?

A reducing balance rate charges interest only on what you still owe, so it falls as you repay. A flat rate charges interest on the full original amount the whole time and costs more. Banks often use reducing balance, while app and asset lenders may use flat.

Are fintech and app loans expensive in Nigeria?

They can be. A small looking monthly fee can work out to a very high yearly rate. Always convert it to an effective annual rate and borrow from lenders licensed by the CBN.

Is my loan rate fixed or variable?

It depends on the lender and product. Some rates are fixed for the term, others can change with the policy rate. Ask your lender, and if it can change, plan for a higher payment.

Can I pay off my loan early in Nigeria?

Usually yes, and on a reducing balance loan it saves interest. Some lenders charge an early settlement fee, so check your agreement before making a large extra payment.

Built and maintained by Hira Fatima, BSc in Computer Science (BSCS)

Hira builds, tests, and maintains the calculators on loancalc.io and writes the guides that go with them.
How we calculate: Reducing balance uses the standard EMI formula; flat rate charges interest on the full original amount. | Last updated: June 2026

Disclaimer: This calculator gives estimates for planning only and is not financial advice. Your actual figures may differ due to fees, taxes, and lender policies. Confirm with your bank or lender before you borrow.