Tala Loan Calculator

Principal Amount: Daily Interest Rate (%): Loan Repayment Term Period (days): Service Fee (%): Select Currency: Extension Fee (Default 8%):

Note: Use the extension fee option only if you have defaulted on the Tala loan product.

To understand more about the Tala loan app we have a complete guide here.

Loan Interest Rate:

The loan interest rate is the percentage of the loan amount that a lender charges a borrower for the use of its money. It is usually expressed as an annual percentage rate (APR). There are different types of interest rates:

Fixed Interest Rate: The interest rate remains the same throughout the loan term.
Variable Interest Rate: The interest rate can change over time based on market conditions.

Interest rates can be calculated in various ways, such as simple interest or compound interest.

Simple Interest: Calculated only on the principal amount of the loan.
Compound Interest: Calculated on the principal amount and also on the accumulated interest of previous periods.

Loan Fees:

Loan fees are additional costs that lenders charge to cover the processing, servicing, and administration of the loan. These fees can vary widely depending on the lender and the type of loan. Common types of loan fees include:

Origination Fee: A one-time fee charged for processing a new loan application.
Service Fee: A fee for ongoing services provided by the lender.
Late Payment Fee: Charged if a borrower fails to make a payment on time.
Prepayment Fee: Charged if a borrower pays off the loan early.
Application Fee: Charged for processing the loan application.
Maintenance Fee: Charged periodically (monthly or yearly) to cover the administrative costs of maintaining the loan.

Example of Loan Interest Rate and Fees:

Consider a loan amount of KSh 4,000 with an interest rate of 18% for a term of 60 days. Additional fees include an excise tax of 20% on the interest, and a one-time service fee.

Interest Calculation:
- Interest = Principal * Interest Rate
- Interest = 4,000 * 0.18 = KSh 720
Excise Tax Calculation:
- Excise Tax = Interest * 0.20
- Excise Tax = 720 * 0.20 = KSh 144
Total Payment:
- Total Payment = Principal + Interest + Excise Tax
- Total Payment = 4,000 + 720 + 144 = KSh 4,864

In this example, the borrower would need to repay KSh 4,864, which includes the principal, interest, and excise tax