Loan calculator: how your monthly payment is worked out

Before taking a loan, most people ask one simple question: “How much will I pay each month?” Knowing the answer lets you plan a household budget or a business’s cash flow in advance. The loan calculator on our website does the maths in seconds, but it helps to understand the logic behind the numbers.

What an annuity payment is

All Finex Kredit loans are repaid in annuity instalments. You pay the same amount every month for the whole term. The amount stays fixed, but its make-up changes: in the first months most of it goes to interest, and towards the end most of it repays the principal.

The main advantage of an annuity is predictability. From day one you know exactly how much to set aside each month — for example, for 24 months.

The formula

The monthly annuity payment is calculated as:

A = S × r × (1 + r)ⁿ / ((1 + r)ⁿ − 1)

Where:

• A — monthly payment;
• S — loan amount;
• r — monthly rate (annual rate / 12 / 100);
• n — term in months.

A worked example

Say you take a business loan of AZN 10,000 for 24 months at 28% a year. The business loan terms fit this example: AZN 100–100,000, 12–36 months, 28–40% a year.

1. 1Monthly rate: 28 / 12 / 100 = 0.023333.
2. 2(1 + r)ⁿ = 1.023333²⁴ ≈ 1.7397.
3. 3A = 10,000 × 0.023333 × 1.7397 / (1.7397 − 1) ≈ AZN 548.88.

So you would pay AZN 548.88 every month for 24 months. Total repayment comes to AZN 13,173.24, of which AZN 3,173.24 is interest.

What each payment contains

Take the first month. The outstanding balance is AZN 10,000, so interest is 10,000 × 0.023333 = AZN 233.33. The remaining AZN 315.55 reduces the principal. In month two, interest is charged on the smaller balance of AZN 9,684.45 and falls to AZN 225.97. By the 24th month interest is just AZN 12.52 and almost the whole payment clears the debt.

The calculator’s payment schedule shows this split month by month: payment, principal, interest and remaining balance.

How to use the calculator

1. 1Choose the loan type: business, gold-secured, agricultural or consumer. Each has its own amount, term and rate range.
2. 2Set the amount with the slider or type it in.
3. 3Pick the term and annual rate.
4. 4You’ll see the monthly payment, total repayment, total interest and the effective annual rate (FİFD).

What changes the result

Three things drive the monthly payment: amount, term and rate. A longer term lowers the monthly payment but raises the total interest. Borrow the same AZN 10,000 over 36 months and your monthly burden drops, but you pay more interest overall. The best choice is usually the shortest term whose payment still feels comfortable.

There is also a 1–3% commission. It doesn’t change the monthly payment, but it does raise the real cost of the loan. That is what the FİFD — the effective annual rate — is for, and the calculator shows it separately with the commission included.

The figures are an estimate

Calculator results are indicative. The final rate, amount and term are set once your application is reviewed. After you apply online, a specialist will contact you within 24 hours to confirm the terms.

Practical tips

• Keep the monthly payment within the part of your income you can comfortably spare.
• When choosing a term, look at total interest as well as the monthly payment.
• Compare loans by their effective annual rate, not the headline rate.
• Keep your payment schedule: watching the balance fall is good motivation.

How the term changes the payment

Borrow the same AZN 10,000 at 28% a year over different terms and the picture looks like this:

• 12 months — a higher payment, but the least interest overall;
• 24 months — AZN 548.88 a month, AZN 3,173.24 interest in total;
• 36 months — the lowest payment, but the most interest overall.

Choosing a term isn’t just about “how much a month”. A longer term eases the monthly burden but raises the loan’s total cost. The best option is the shortest term whose payment fits comfortably within your income. Change the term in the calculator and you’ll see the difference straight away.

How to judge what you can afford

Before applying, subtract your fixed costs — rent, utilities, food, transport, other loans — from your monthly income. Putting everything that’s left towards a loan isn’t wise: you need a buffer for the unexpected. In practice it’s safer when the loan payment takes only a comfortable share of your spare money.

Frequently asked questions

Is the calculator figure final? No, it’s an estimate. Final terms are set after your application is reviewed.

Is the commission included in the monthly payment? The commission doesn’t change the monthly payment, but it raises the loan’s real cost — that’s what the effective annual rate (FİFD) shows.

Where can I see the payment schedule? In the calculator on the “Loans” page, click “View payment schedule”.

To try it now, open the calculator on the “Loans” page and enter your own numbers.