Personal Loan Calculator

Why the payment stays level while the interest doesn't

On a reducing-balance loan, interest is charged only on what you still owe, not on the original amount borrowed. The lender solves for a single fixed monthly payment that, applied every month for the full term, exactly clears both the interest and the principal. Because the outstanding balance falls a little more each month, the interest portion of that fixed payment shrinks over time and the principal portion grows — even though the payment itself never changes.

There is no single published personal loan rate in Kenya to state as fact — banks and SACCOs price loans differently by product and borrower risk. Enter the rate your lender has actually quoted you, or your own working assumption, and the calculator does the arithmetic on that number.

Worked example: the calculator's own defaults

On a KES 300,000 loan at 14% over 3 years, the fixed monthly payment comes to roughly KES 10,252. Over the 36 payments, total repayments come to around KES 369,000 — meaning the cost of borrowing, the total interest, is roughly KES 69,000 on top of the KES 300,000 borrowed.

What changes the total interest most

Term length matters as much as rate. Stretching the same loan over a longer term lowers the monthly payment, but because interest keeps accruing on a balance that falls more slowly, the total interest paid over the life of the loan rises — often by more than borrowers expect from a modest change in term.