Equated monthly instalment for any naira loan.
Monthly instalment
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Total payment
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Total interest
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What sits inside a single instalment
An equated monthly instalment looks like one flat number, but every payment is really two things stitched together: the interest charged on the balance you still owe, and a chunk of principal that chips that balance down. Early on the balance is large, so most of the payment is interest and only a little touches the principal. As the loan runs, the balance shrinks, the interest portion falls, and more of each fixed payment goes on principal. By the final month almost the whole instalment is principal and the loan clears. This calculator gives you the instalment, the total you will hand over across the tenor, and the slice of that total that is pure interest.
It is a general-purpose tool, so it works for a salary advance, a car loan, an asset-finance facility, or any naira loan that repays in level monthly amounts. It deliberately ignores fees, insurance, and any management charge a lender adds, which means the real cost of a Nigerian loan is usually a touch above what you see here. Read the figure as the pure principal-and-interest cost and treat the lender's offer letter as the final word.
The formula doing the work
The instalment comes from the standard amortising-loan equation. The tool takes your annual rate, divides it by twelve to get a monthly rate, and solves for the fixed payment that repays the principal exactly over the number of months you enter. Because interest compounds monthly on the falling balance, a small change in the rate moves the payment more than people expect, and stretching the tenor lowers the monthly figure while quietly raising the total interest. If you set the rate to zero, the tool simply splits the principal evenly across the months.
A NGN 5 million loan over four years
Run the defaults: a NGN 5,000,000 principal at 24 percent a year over 48 months. Twenty-four percent a year is 2 percent a month. Feeding that into the instalment formula gives a monthly payment of about NGN 163,009. Over 48 months you repay roughly NGN 7,824,441 in total, of which around NGN 2,824,441 is interest, more than half the original principal again. That is the price of borrowing at a high rate over four years, and it is why shortening the tenor or clearing the loan early saves real money. The rate here is illustrative, so use the rate your lender actually quotes.
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Trimming the interest you pay
The total interest is the lever most worth pulling. Two loans of the same size and rate can cost very different amounts depending on tenor, so before you accept the longest term on offer, run a shorter one and see what the higher payment buys you in interest saved. If your lender allows penalty-free early repayment, paying a little extra each month or dropping in a bonus when you can shaves the balance and cuts the interest that compounds on it. Always ask whether early settlement carries a charge, because some Nigerian facilities recover part of the interest you hoped to avoid.
The most common error is comparing loans on the monthly instalment alone. A lower payment can hide a longer tenor and a far bigger total, so compare the total interest and, where the lender discloses it, the effective annual rate that bundles in fees. Withholding tax does not apply to your repayments, but a lender will deduct WHT on interest it pays you on deposits, which is a separate matter handled by the FIRS.
Is the EMI the full cost of the loan?
No. This calculator shows only principal and interest. Nigerian lenders commonly add an upfront management or processing fee, mandatory credit-life insurance, and sometimes account charges. Those raise the true cost above the figure here, so ask for the all-in cost and, if quoted, the effective annual rate before you sign.
Why does the early balance fall so slowly?
Because interest is charged on the outstanding balance, which is highest at the start. In the first months a large part of your fixed instalment covers that interest and only a little reduces the principal. The principal portion grows every month, so the balance falls faster and faster as the loan matures.