How a flexi loan is worked out
A flexi loan here is a term loan with equal monthly repayments, an optional arrangement fee and no charge for settling early. UK lenders such as Fleximize and iwoca quote the rate per month or per year and treat it as the rate charged each month, so a yearly rate is divided by 12. The monthly repayment is amount × r ÷ (1 − (1 + r)^−n), where r is the monthly rate and n the number of months.
The APR shown is the effective annual rate, (1 + monthly rate)^12 − 1 when there are no fees, or the rate that equates the cash you receive with the repayments when there is a fee. Lenders may use a different year convention for their own representative APR, as the iwoca example below shows.
Worked example: £15,000 over 18 months at 34.9% a year
Fleximize's published example is £15,000 over 18 months at a fixed annual rate of 34.9%. The monthly rate is 2.9083% and the repayment is £1,082.20 a month, in line with the £1,082.20 on its page. The total repayable is £19,479.52 (the page shows £19,479.60, which is the rounded repayment times 18), of which £4,479.52 is interest, and the APR is 41.06%, which Fleximize rounds to 41.1%.
Settling early
Settling after 9 repayments leaves a balance of £8,462.23, so you repay £18,201.99 in all and save £1,277.53 of interest. The calculator assumes no early repayment charge, because both Fleximize and iwoca say they make none; check your own agreement.
A rate quoted per month
iwoca quotes a rate per 30 days. £250,000 over 12 months at 3.33% a month is £25,612.82 a month and £307,353.86 in total, matching iwoca's £25,613 and £307,354. The effective annual rate here is 48.16%; iwoca's page shows a 49% representative APR, which is what compounding the rate over 365 ÷ 30 periods instead of 12 gives. That is our own arithmetic, as iwoca does not publish its method.
What this calculator leaves out
It leaves out a variable rate, repayment holidays, top-ups, and the part-month interest if you settle between repayment dates. A fee for longer terms is an input you can set. A lender's representative APR is the rate at least 51% of customers receive, and your own rate may be higher.
To see why the APR is higher than the rate, use the flex loan APR explanation.
To model overpayments, an interest-only start and more fees, use the business loan calculator.
Use the right country page
This page uses pounds and UK terms such as an arrangement fee, with a rate that can be per month. The country choices above the inputs open separate local pages. Choosing United States opens the US flex loan calculator, which works in dollars with an origination fee and a yearly APR. Inputs reset and amounts are not converted.
Inputs for the flexi loan calculator
Loan amount
How much you want to borrow, before any fee is taken from it.
The rate is quoted
Per year is divided by 12 each month. Per month is used as the monthly rate.
Interest rate
The rate from your quote, per year or per month as chosen above.
Term
The months you take to repay the loan. A whole number up to 120.
Arrangement fee
A percentage of the loan, from your quote. Enter zero if none.
Arrangement fee is
Deducted means you receive less. Added means you pay interest on it. Separate means cash.
Settle the loan after
Repay the whole balance after this many months to see the saving. Zero runs to the end.
CALCULATOR QUESTIONS
UK flexi loan calculator questions
How do you calculate a flexi loan repayment?
Payment = amount × r ÷ (1 − (1 + r)^−n). £15,000 over 18 months at 34.9% a year is £1,082.20 a month.
Is the rate per month or per year?
Choose which. 34.9% a year is 2.9083% a month, while 3.33% per month is a yearly rate of 39.96% before compounding.
How much does settling early save?
Settling the £15,000 loan after 9 repayments saves £1,277.53 of interest.
Why is the APR higher than the rate?
Interest compounds monthly, and a fee reduces the cash you receive. Without a fee the APR is 41.06% against a rate of 34.9%.
Can the monthly rate be a bank's flexible loan rate?
Yes, if you have a rate and term from a quote. The results are estimates, not a lender's offer.