Free tool · Flat & reducing rates · instant
See the true cost of borrowing.
Enter the principal, the annual interest rate and the term. You'll get the fixed monthly payment, the total interest over the life of the loan, and the full month-by-month amortization schedule.
Estimates only. Your bank's fees, insurance, rounding and disbursement schedule will change the exact figures.
Annual declining-balance rate — what most banks quote.
How often you repay the loan.
Flat rate vs reducing balance — know which you're quoted.
Banks and lenders in Ethiopia quote both — and this calculator computes both; switch between them next to the interest rate above. A reducing-balance rate charges interest only on the amount you still owe, so every payment shrinks next month's interest. A flat rate charges interest on the original principal for the entire term, which roughly doubles the true cost: a 10% flat rate costs about as much as an 18–19% reducing rate.
Before you sign, ask "is this rate flat or declining?" — then enter the quote in flat mode and see its reducing-balance equivalent instantly. Lending to staff instead? Payroll-deducted loan repayments are one of the things NYLOS finance and payroll handle inline. And to see what a salary is worth after tax, use the salary calculator.
Frequently asked questions.
How is the monthly payment calculated?
With the standard annuity formula: payment = P × r ÷ (1 − (1 + r)⁻ⁿ), where P is the principal, r the monthly interest rate and n the number of months. Every payment is the same; early payments are mostly interest, later ones mostly principal.
What is the difference between a flat rate and a reducing-balance rate?
A reducing-balance rate charges interest only on what you still owe, so the interest portion shrinks every month. A flat rate charges interest on the original principal for the whole term — a 10% flat rate costs roughly the same as an 18–19% reducing rate on a typical term. Always ask which one a quoted rate is; this calculator computes both, and shows the reducing-balance equivalent of any flat quote.
Why do I pay so much interest at the start of the loan?
Because interest accrues on the outstanding balance, and the balance is largest at the start. As payments chip away at the principal, the interest share of each identical payment falls — that's the amortization curve this page charts.
Does repaying early save interest?
On a reducing-balance loan, yes: interest stops accruing on whatever principal you repay early. Check your contract for prepayment fees, which can offset part of the saving.
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