Calculate loan repayments, total interest, and amortization schedules. Perfect for personal loans, mortgages, and business financing in Kenya.
How loan payments are calculated (2026).
Understanding the step-by-step process of calculating loan repayments, interest, and total costs in Kenya
Start by entering your loan amount (principal), annual interest rate, and loan term in months or years. You can also add optional details like processing fees, insurance, and excise duty (20% on fees in Kenya). The calculator supports various loan types: reducing balance, flat rate, interest-only, and balloon payments.
The calculator uses the standard amortization formula for reducing balance loans: PMT = P × [r(1+r)^n] / [(1+r)^n - 1], where P is principal, r is monthly interest rate, and n is number of months. This formula ensures each payment covers interest on the current balance plus a portion of the principal, with interest decreasing over time.
All upfront fees (processing, insurance, excise duty) are added to determine the true cost of borrowing. The calculator computes APR (Annual Percentage Rate) using the IRR (Internal Rate of Return) method, which includes all fees and costs. APR is always higher than the stated interest rate and shows the true annual cost of the loan.
The calculator creates a detailed month-by-month breakdown showing how each payment is split between principal and interest. You can see your outstanding balance decrease over time, total interest paid, and the effect of extra payments. The schedule helps you understand exactly where your money goes each month.
What each calculation means and how to interpret your loan costs and repayment schedule
This is the fixed amount you'll pay each month for the loan term. It includes both principal repayment and interest. With reducing balance loans (most common in Kenya), the interest portion decreases over time while the principal portion increases, but your total monthly payment stays the same.
The total amount you'll pay in interest over the entire loan term, beyond the principal borrowed. This shows the true cost of borrowing. Lower interest rates, shorter terms, or extra payments all reduce total interest paid. Compare this across different loan offers to find the best deal.
APR includes the interest rate plus all fees and costs, expressed as an annual percentage. It's always higher than the stated interest rate and gives you the true cost of borrowing. Always compare APR when evaluating loan offers from different banks, not just the interest rate.
The sum of all payments you'll make over the loan term, including principal, interest, and all fees. This is the total cash outflow from your pocket. Subtract the principal to see how much extra you're paying for the privilege of borrowing money.
A detailed month-by-month breakdown showing how each payment is split between principal and interest, plus your remaining balance. Early payments are mostly interest; later payments are mostly principal. Use this to see the impact of extra payments or to verify your bank's statements.
The percentage of your monthly income that goes to loan repayment. Banks typically require DSR below 40-50%. If your DSR is too high, you may not qualify for the loan or may need to reduce the loan amount, extend the term, or increase your income.
Common scenarios where this calculator helps you make informed borrowing decisions
When shopping for loans from different banks, use the calculator to compare true costs. Enter each bank's interest rate, fees, and terms to see which offers the lowest APR and total cost. Don't just compare interest rates—fees can significantly increase the true cost.
Before applying for a loan, calculate the monthly payment and compare it to your net income. A safe rule: loan payments shouldn't exceed 40% of your net monthly income. Use our Net Pay calculator to determine your take-home pay after taxes and deductions.
See how extra monthly payments or lump sum payments reduce your loan term and total interest paid. Even small extra payments can save thousands in interest and help you become debt-free faster. The calculator shows exactly how much you'll save.
Calculate mortgage payments for different property prices, down payments, and interest rates. See how a larger down payment or shorter term affects your monthly payment and total interest. Essential for budgeting before buying property in Kenya.
Considering refinancing your existing loan? Calculate the new monthly payment and total cost with the new interest rate and term. Compare against your current loan to see if refinancing saves money after accounting for any refinancing fees.
For business loans, calculate monthly payments and ensure they fit within your projected cash flow. See how different loan amounts and terms affect your monthly obligations. Critical for maintaining healthy business finances while accessing growth capital.
Our loan calculations are based on standard financial formulas and Kenya banking regulations
See how loan calculations work for typical Kenyan borrowing scenarios with actual 2026 rates
Loan Amount: KES 500,000
Monthly Payment: KES 17,089
Total Interest: KES 115,197
APR (with fees): 15.2%
Loan Amount: KES 5,000,000
Monthly Payment: KES 55,054
Total Interest: KES 8,213,034
APR (with fees): 12.4%
Loan Amount: KES 2,000,000
Monthly Payment: KES 48,636
Total Interest: KES 918,167
APR (with fees): 17.1%
Loan Amount: KES 1,000,000
Monthly Payment: KES 49,924
Total Interest: KES 198,178
APR (with fees): 19.5%
Common questions about loan calculations.
We use the standard amortization formula based on reducing balance. Each payment covers interest on the current balance plus a portion of the principal.
Reducing balance. Most Kenyan banks use reducing balance where interest is charged on the outstanding principal each month.
Personal loan rates range from 12-24% p.a. Mortgage rates range from 10-15% p.a. Check with specific banks for current rates.
A common rule: your monthly loan payment should not exceed 40% of your net monthly income. Use our Net Pay calculator to determine affordability.
The calculator includes processing fees, insurance, excise duty (20% on fees in Kenya), and any other specified fees. These are all added to determine the true cost of the loan.
The interest rate is the annual rate charged on the principal. APR (Annual Percentage Rate) includes the interest rate plus all fees and costs, giving you the true annual cost of borrowing. Always compare APR when evaluating loans.
Yes. The calculator allows you to add extra monthly payments or one-time lump sum payments. Extra payments reduce your principal faster, lowering total interest paid and shortening the loan term.
A grace period is a time at the start of the loan where you don't make full payments. During a payment holiday, no payments are made. During an interest-only grace period, you pay only interest. The principal repayment starts after the grace period ends.
A balloon payment loan has lower monthly payments during the term, with a large lump sum payment due at the end. This structure can reduce monthly payments but requires planning to have funds available for the final balloon payment.
In Kenya, excise duty is charged at 20% on most loan fees including processing fees, arrangement fees, and appraisal fees. The calculator includes this in the total cost. Excise duty does not apply to the interest or principal.
Look at the APR (Annual Percentage Rate), not just the interest rate. APR includes all fees, insurance, and excise duty, giving you the true annual cost. Also check the total amount payable (principal + interest + fees) to see the full cash outflow over the loan term.
Principal is the original loan amount you borrowed. Interest is the cost of borrowing that money, calculated as a percentage of the outstanding principal. Each monthly payment includes both principal repayment and interest charges.
Shorter terms have higher monthly payments but lower total interest. Longer terms have lower monthly payments but higher total interest. Choose based on your monthly budget and how much total interest you're willing to pay. Use the calculator to compare different terms.
Extra payments go directly to principal, reducing your outstanding balance faster. This saves significant interest and shortens your loan term. Even KES 1,000 extra per month can save thousands in interest over a long-term loan. The calculator shows exact savings.
An amortization schedule is a detailed table showing each monthly payment breakdown: how much goes to principal, how much to interest, and your remaining balance. It shows how your loan is paid off over time, with interest decreasing and principal increasing each month.
Yes, if interest rates have dropped or your credit has improved. Calculate the new monthly payment and total cost with the lower rate, then compare against your current loan. Factor in any refinancing fees to ensure you'll actually save money.
Missing payments results in late fees, penalty interest, and negative credit bureau reporting. Your loan may be declared in default, leading to legal action and asset repossession. Always contact your bank immediately if you're struggling to make payments—they may offer restructuring options.
Banks assess your Debt Service Ratio (DSR): monthly loan payment divided by net monthly income. Most banks require DSR below 40-50%. They also check your credit history, employment stability, and existing debts. Higher income and good credit history increase your eligibility.
Fixed rates stay the same throughout the loan term, giving predictable payments. Variable rates change based on market conditions (usually tied to CBK rate), meaning your payment can increase or decrease. Fixed rates offer stability; variable rates may offer lower initial rates but carry risk.
Most Kenyan banks allow early repayment, but some charge prepayment penalties (typically 1-5% of outstanding balance). Check your loan agreement for prepayment terms. Even with a penalty, early repayment often saves money by reducing total interest paid. Calculate the break-even point.