What are typical loan interest rates in Nigeria?

Nigerian bank personal loan rates typically range from 18-30% per annum, depending on the bank, your credit history, and whether you are salaried or self-employed. The CBN MPR is currently 26.5%.

How much can I borrow in Nigeria?

Nigerian banks typically limit loan repayments to 30-33% of your gross monthly income (DTI ratio). Use the Affordability tab to calculate your maximum loan amount based on your income.

Nigerian Loan Calculator

Calculate monthly repayments, compare bank offers, and check what you can afford.

Loan Details

Loan Amount

₦

Annual Interest Rate

% p.a.

Loan Tenure

Monthly Repayment

₦76,381

Total Repayment

₦2,749,713

Total Interest

₦749,713

Interest Ratio

27.3%

Amortization Schedule (First 12 months)

Month	Payment	Principal	Interest	Balance
1	₦76,381	₦39,714	₦36,667	₦1,960,286
2	₦76,381	₦40,442	₦35,939	₦1,919,843
3	₦76,381	₦41,184	₦35,197	₦1,878,660
4	₦76,381	₦41,939	₦34,442	₦1,836,721
5	₦76,381	₦42,708	₦33,673	₦1,794,013
6	₦76,381	₦43,491	₦32,890	₦1,750,522
7	₦76,381	₦44,288	₦32,093	₦1,706,234
8	₦76,381	₦45,100	₦31,281	₦1,661,135
9	₦76,381	₦45,927	₦30,454	₦1,615,208
10	₦76,381	₦46,769	₦29,612	₦1,568,439
11	₦76,381	₦47,626	₦28,755	₦1,520,813
12	₦76,381	₦48,499	₦27,882	₦1,472,313

How to Use This Calculator

Personal Loan tab

Enter your loan amount, annual interest rate, and tenure. The calculator instantly shows your monthly repayment, total interest, and full amortization schedule. Use the quick presets (₦500K, ₦1M, ₦5M, ₦10M) to explore different loan sizes.

Compare Loans tab

Received offers from two different banks? Enter both side by side. The calculator shows which loan costs less in total — considering both the monthly payment and the total interest over the full term. A lower monthly payment from a longer tenure can mean paying far more interest overall.

Affordability tab

Start with your monthly income and set a debt-to-income (DTI) limit. Most Nigerian banks use 30–33% DTI — meaning your loan repayment shouldn't exceed one-third of your income. The calculator reverse-solves the maximum loan you can responsibly borrow.

The Formula

Nigerian banks use the standard reducing-balance (amortization) formula:

M = P × [r(1+r)^n] / [(1+r)^n − 1] Where: M = monthly payment P = principal (loan amount) r = monthly interest rate (annual rate ÷ 12 ÷ 100) n = number of months

Each month, interest is charged on the remaining balance, not the original amount. This means your early payments are mostly interest, while later payments are mostly principal — you can see this clearly in the amortization table.

This is different from flat-rate interest, which some lenders quote. A 22% flat rate is actually equivalent to roughly 40% per annum on a reducing balance — always ask your bank which method they use.

Example: ₦2M Personal Loan

Emeka borrows ₦2,000,000 from his bank

Emeka needs ₦2M for home renovation. Two banks made offers. He uses the Compare tab to decide:

Loan amount₦2,000,000

Bank A (GTBank)

Rate22% p.a.

Tenure36 months

Monthly payment₦75,920

Total interest₦733,120

Bank B (Access Bank)

Rate20% p.a.

Tenure48 months

Monthly payment₦60,871

Total interest₦921,808

Bank B has a lower monthly payment and a lower rate — but Emeka would pay ₦188,688 more in interest because of the longer tenure. He chose Bank A, which costs less overall, and fits within his 30% DTI on his ₦300,000 monthly salary.

Nigerian Bank Lending Rates (2026)

Interest rates vary significantly by bank and loan type. Here are typical ranges:

Loan Type	Typical Rate (p.a.)	Notes
Personal Loan (salaried)	18–28%	Deducted from salary
Personal Loan (self-employed)	24–35%	Higher risk premium
SME Loan	20–30%	Varies by collateral
NHF Mortgage	6%	Federal Mortgage Bank
Commercial Mortgage	18–25%	Commercial banks
Car Loan	22–30%	Asset-backed
Payday Loan (fintechs)	30–60%+	Very high, short-term only

The CBN Monetary Policy Rate (MPR) is currently 26.5%. Bank lending rates are typically MPR + 3–8%.

FAQ

What is the difference between flat rate and reducing balance? ▼

With flat rate interest, the rate is applied to the original loan amount throughout. With reducing balance (also called diminishing balance), interest is calculated on the outstanding balance, which reduces each month as you repay. Most Nigerian banks use reducing balance, but some fintech lenders use flat rate — which is more expensive. A 20% flat rate is roughly equivalent to 37–38% reducing balance. Always ask which method your lender uses.

Should I choose a shorter or longer loan tenure? ▼

Shorter tenure = higher monthly payments, but less total interest paid. Longer tenure = lower monthly payments, but more total interest. Use the Compare tab to see the actual difference in naira. As a rule of thumb: choose the shortest tenure you can afford without straining your monthly cash flow. With Nigerian rates at 18–30%, even a few extra years adds up to hundreds of thousands in extra interest.

What is DTI and why does it matter? ▼

DTI (Debt-to-Income ratio) is the percentage of your gross monthly income that goes towards debt repayments. Nigerian banks typically approve loans only if total monthly debt payments are below 30–33% of income. For example, if you earn ₦300,000/month, your maximum monthly loan payment would be around ₦90,000–₦99,000. If you already have existing loans, those payments count too.

Can I repay my loan early in Nigeria? ▼

Most Nigerian banks allow early repayment, but some charge a prepayment penalty (typically 1–3% of the outstanding balance). Check your loan agreement before making early payments. Early repayment reduces the total interest you pay significantly — especially in the first half of the loan term, when interest makes up most of your monthly payment.

Does this calculator include all fees? ▼

This calculator shows interest costs based on the rate you enter. Nigerian banks often add: management fees (0.5–2%), insurance (credit life), stamp duty, and processing fees. These are typically charged upfront or built into the loan amount. Ask your bank for the Annual Percentage Rate (APR) or total cost of credit — not just the interest rate.