Take ৳10,000 and pay ৳110 every day for 100 days: the interest is ৳1,000, or 10% of the loan. But because money goes back every day, the true yearly rate is about 70%. Enter your loan and instalments below.
৳
= 10 thousand taka
What you know
৳
৳
True yearly rate (APR)
70.06%
Effective yearly rate 101.36%
Daily instalment
৳110
Total repaid
৳11,000
Total interest
৳1,000
Interest on the whole loan
10%
Total time
100 days
Simple yearly equivalent
36.5%
Regulated microfinance ceiling (MRA)
24%
This loan's true rate (70.1%) is above the ceiling for licensed microfinance institutions (24%, declining balance).
The MRA ceiling is being verified — check the latest circular.
Taking ৳10,000 and paying ৳110 a day for 100 instalments (৳11,000 in total) is 10% on the whole loan, but because money flows back every day the true yearly rate is about 70.1%.
Quoted vs true rate: “10% for 100 days” sounds low, but because money goes back every day the real cost is much higher.
Alternatives: licensed microfinance institutions and banks usually charge less, in writing. Get the total repayment and number of instalments in writing before borrowing.
For weekly NGO loans, use the NGO loan true rate calculator.
More: why daily instalments double the true rate
If you kept the whole ৳10,000 for all 100 days, ৳1,000 of interest would be 36.5% a year. But instalments start on day one, so on average you hold only about half the money. Paying the same interest on less money roughly doubles the true rate.
Many people avoid interest for religious reasons. This calculator doesn’t encourage any loan; it only shows the real cost plainly.
Frequently asked questions
How is interest on a daily-instalment loan worked out?
Total repaid minus the amount received is the interest. For the true rate you also need how fast the money goes back. With daily payments you hold the full amount for well under half the time on average, so the true rate is roughly double the quoted one.
What does '10%' really mean?
10% over 100 days (10,000 received, 11,000 repaid) is 36.5% a year as simple interest, and about 70% a year (APR) once daily instalments are counted. Compounded, the effective rate is about 101%.
Does skipping Fridays lower the rate?
Yes, because the same 100 instalments take 116 days. In the example above the true rate falls to about 61%.
What is the maximum NGO interest rate?
For licensed microfinance institutions the Microcredit Regulatory Authority (MRA) caps the service charge at 24% a year on a declining balance (latest circular being verified). Many private or group daily loans are far above it.
APR vs effective rate?
APR = daily rate × 365, the way banks quote a yearly rate. The effective rate also counts interest on each day's interest, so it is higher.
What if a fee or savings is kept back when the loan is paid out?
Enter only the amount you actually received. If ৳500 is kept back from a ৳10,000 loan, you get ৳9,500; paying ৳110 a day for 100 days then costs ৳1,500, a true yearly rate of about 109%.