What microfinance is
Microfinance means small loans, often for people starting or running a very small business who can't easily borrow from banks. Lenders include community development finance institutions and other social lenders.
Some microfinance lenders quote a 'flat' rate charged on the original amount for the whole term. A flat rate costs more than the same headline rate charged on a reducing balance, which is what this calculator uses, so compare APRs.
Worked example
Borrowing £1,000 at 20% over 12 months costs £92.63 a month, £1,111.61 in total.
Interest is worked out monthly at one twelfth of the annual rate. Lenders may calculate interest differently (some charge it daily), so your actual payments can differ slightly.
Compare the total cost
For small loans, fees can make a big difference. Compare the APR and the total amount repayable.
Inputs for the micro finance loan calculator
Amount to borrow
The amount you want to borrow.
Interest rate (per year)
The annual interest rate on your loan. The rate shown is only an example, so enter the rate from your quote.
Term
How many months you'll repay over.
CALCULATOR QUESTIONS
Microfinance loan calculator questions
What is a microfinance loan?
A small loan, often for very small businesses or people who find it hard to borrow from banks.
What's a flat interest rate?
Interest charged on the original amount for the whole term, even as you repay. It costs more than the same rate on a reducing balance.
Who offers microfinance in the UK?
Community development finance institutions and other social lenders.
Does this include fees?
No. Add any fees from your offer when comparing.