Loangate is a digital loan app targeting the Zambian market.

The Maximum Annual Percentage Rate (APR) breakdown is as follows:
Processing fee: 5%
Insurance: 0.377%
Interest: 3-12 months: 12.5% - 15%

The minimum and maximum period for repayment, Maximum Monthly Percentage Rate, a representative example of the total cost of the loan, including all applicable fees:

Loan amount; K1,000 to K35,000

The minimum and maximum period for repayment; 3 to 12 months

Interest; 12.5% per month, based on the reducing balance method will be an average of 9% per month.

Other fees; we charge a one-time proccing fee and life insurance of 5.377%

Representative example of the total cost of the loan, including all applicable fees; if your loan amount is K2,000 and the period for repayment is 3 months (with 3 equal installments) interest is 12.5% per month with a one-time processing fee of K 107.54, then the total cost of the loan is 2,519.59 ( principal and interest calculation) + K107.54 (all applicable fees) = K519.59 + K107.54 = K627.13 and the total amount payable is K2,000 + K519.59+K107.54 = K2,627.13 with monthly payment = K839.36

The formula used for reducing balance is:
PR[((1+R)^N)/(1+R)^N-1)

P=principal

R=monthly interest

N= number of installments

If for example, we take 2000K for 3 months with 12.5% monthly interest, we should get the following:

2000*0.125*((1.125^3)/((1.125^3)-1)) = 839.86

Now, when coming to calculate the way each installment is divided between principal and interest, we are using the following:

Installment 1: 2000*0.125=250, interest = 250

839.86 – 250=589.86, that is the principal reduced from 1st installment.

Installment 2: 2000-589.86=1410.14, this is the principal balance

1410.14*0.125=176.26, this is the interest for 2nd installment

839.86-176.26=663.59, this the principal reduced in the second installment

Installment3: 1410.14-663.59= 746.54, this is principal balance

746.54*0.125=93.318, this is 3rd interest.