Loan calculator Uganda
Put in the loan amount in UGX, the rate a month or a year and the term in months. Get the instalment, the total interest, the effective annual rate and the full repayment schedule, with flat rate and reducing balance side by side and the money lender rate cap checked as you type.
Short answer: on UGX 5,000,000 over 12 months at 3 percent a month, a reducing balance loan with equal instalments costs UGX 502,310 a month and UGX 1,027,725 in interest. The same rate charged flat costs UGX 566,667 a month and UGX 1,800,000 in interest, UGX 772,275 more for the same money. Your own figures below.
Your loan
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Instalment: UGX 502,310every month for 12 months, reducing balance with equal instalments
- Loan amountUGX 5,000,000
- Processing fee taken off at the startNot included
- Cash in the borrower's handUGX 5,000,000
- Rate used3% a month, 36% a year nominal
- Total interest over the termUGX 1,027,725
- Total fees and interestUGX 1,027,725
- Total repaymentUGX 6,027,725
- Effective annual rate on the cash received42.58%
Flat against reducing balance, same money
The same UGX 5,000,000 over 12 months at 3 percent a month, worked three ways.
| Method | Instalment | Total interest | Total repayment | Effective annual rate |
|---|---|---|---|---|
| Flat rate | UGX 566,667 | UGX 1,800,000 | UGX 6,800,000 | 81.23% |
| Reducing balance, equal instalments | UGX 502,310 | UGX 1,027,725 | UGX 6,027,725 | 42.58% |
| Reducing balance, equal principal | UGX 566,667 falling to UGX 429,167 | UGX 975,000 | UGX 5,975,000 | 42.58% |
Reading: flat rate costs UGX 772,275 more than reducing balance with equal instalments on these figures, about 1.75 times the interest.
Repayment schedule
Every month of the loan, on the method selected above.
| Month | Instalment | Interest | Principal | Balance after |
|---|---|---|---|---|
| Totals | UGX 6,027,725 | UGX 1,027,725 | UGX 5,000,000 | UGX 0 |
Reading: on these figures the borrower repays UGX 1,027,725 in interest.
This is arithmetic on the figures you typed, next to the money lending rules published in the sources listed below on the dates shown. It is not legal or financial advice, and it does not replace a lender's own offer letter or a ruling from the regulator.
How this calculator works
Every figure above is arithmetic on what you typed. Nothing is fetched and nothing is estimated. In plain words, where P is the loan amount, r is the monthly rate written as a decimal, so 3 percent is 0.03, and n is the number of months:
- A yearly rate becomes a monthly rate by dividing by 12. That is the nominal convention Ugandan lenders quote in, so 24 percent a year is read as 2 percent a month.
- Flat rate charges interest on the original amount for the whole term: total interest is P times r times n, and the instalment is the loan plus that interest, divided by n. The interest never falls, however much you have repaid.
- Reducing balance with equal instalments charges interest on what is still owed and keeps the payment the same: the instalment is P times r, divided by 1 minus (1 plus r) to the power of minus n. Each month, interest is r times the balance, and whatever is left of the instalment clears principal.
- Reducing balance with equal principal repays P divided by n of the principal every month and adds interest on the balance still owed, so the payment starts high and falls. Total interest is r times P times (n plus 1), divided by 2.
- Total repayment is the loan amount plus the total interest. A processing fee is not part of the instalment: it is taken off at the start, so it comes out of the cash in the borrower's hand instead.
- The effective annual rate is the rate that makes the instalments, discounted month by month, add back up to the cash the borrower actually received. It is found by search rather than a formula, then turned into a year with (1 plus the monthly rate) to the power of 12, minus 1. It is the only number that compares a flat loan, a reducing balance loan and a fee on equal terms.
- The nominal annual rate is simply 12 times the monthly rate. It is what a lender usually means by a rate a year, and it is always lower than the effective rate because it ignores monthly compounding.
Interest is charged monthly throughout. Loans that charge daily or weekly, or that hold a first instalment back at disbursement, will differ, and so will a loan with a grace period on principal.
The Uganda money lending rules this page uses, with the date each was checked
These are the rules the calculator points at. They are set out here so you can see exactly what was checked and when. We are not the regulator and nothing here is legal advice: for a ruling on your own lending, go to the Ministry of Finance, which took over the licensing function from UMRA, or take advice.
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Money lender interest cap2.8 percent a month
Legal Notice No. 21 of 2024, issued by the Minister of Finance, Matia Kasaija, in consultation with UMRA, caps the interest a licensed money lender may charge at 2.8 percent a month, which is 33.6 percent a year. The UMRA website states the same figure and cites section 89 of the Tier 4 Microfinance Institutions and Money Lenders Act Cap. 61, which is section 90 of the 2016 Act as published. ICPAU explains that the 2.8 percent is charged on the principal, the actual sum advanced.
Source: Legal Notice No. 21 of 2024 as reported by ChimpReports, Nile Post and ICPAU, with the UMRA website FAQ. Checked 19 September 2026.
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Who the cap coversLicensed money lenders only
Section 78(2) of the Act excludes banks and insurers, societies registered under the Cooperative Societies Act, which includes SACCOs, and bodies empowered by their own Act of Parliament to lend, from the definition of a money lender. The cap therefore does not reach SACCOs. Some press coverage describes the notice as covering tier 4 microfinance institutions and money lenders, but the enabling section covers money lenders only, and ICPAU reads it the same way.
Source: Tier 4 Microfinance Institutions and Money Lenders Act 2016, sections 78(2) and 90, with the ICPAU article by CPA John Sebuuma. Checked 19 September 2026.
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Charging above the capUp to UGX 1,000,000
The Minister may set a maximum rate by notice in the Gazette, and charging above it is an offence with a fine of up to 50 currency points, which is UGX 1,000,000 at UGX 20,000 a currency point, possible cancellation of the licence and an order to refund the excess.
Source: section 90 of the 2016 Act, section 89 of Cap. 61, with Schedule 1 for the currency point. Checked 19 September 2026.
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Interest on the outstanding balance Needs confirmationConfirm the wording
A money lender is reported to be required to compute interest on the monthly outstanding balance of the principal, that is the principal left after deducting what the borrower has already repaid, which would rule out flat rate interest for licensed money lenders. The source given is Regulation 21(1) of the Money Lenders Regulations 2018, but ULII returns an error to automated requests, so the exact wording could not be read. Open the statutory instrument yourself, or ask the regulator, before you price a loan on a flat rate.
Source: cited as SI 2018 No. 8, Regulation 21(1); the text was not confirmed. Checked 19 September 2026.
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Compound interest and default interestNot allowed
A money lending contract that provides for compound interest, or for the interest rate or the amount to rise because of a default, is illegal and unenforceable. After a default the lender may only charge simple interest on the overdue sum. A court can also reopen a transaction where the interest or charges are excessive or the deal is harsh, cut what the borrower owes, order refunds, set aside security and order compensation where security was sold.
Source: sections 86 and 89 of the Tier 4 Microfinance Institutions and Money Lenders Act 2016. Checked 19 September 2026.
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A money lender must be a licensed companyUGX 4,000,000 fine
Anyone carrying on money lending business must be a company and must hold a money lending licence, so a sole trader cannot be licensed. Lending without a licence is an offence with a fine of 200 currency points, UGX 4,000,000, rising to 400 currency points, UGX 8,000,000, for a repeat offence, and the court may bar the person from money lending. A licence expires on 31 December every year and must be renewed, with an annual fee.
Source: sections 78(1), 79, 81, 82 and 84 of the Act. Checked 19 September 2026.
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What the loan contract must showInterest as a percentage a year
The contract must be in writing, signed by lender and borrower and witnessed by a third party, and must show the disbursement date, the principal, the interest as a percentage per year, the security, the borrower's duties, the mode of repayment, the guarantors and the right to repay early. The lender must also issue a receipt immediately for every repayment and keep a record of the disbursement date, principal, interest rate and every repayment with its date.
Source: sections 85 and 87 of the Act. Checked 19 September 2026.
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SACCO borrowers: early repaymentAllowed, without full term interest
A SACCO member may repay a loan early, in whole or in part, on any business day without being charged the full term interest, and the SACCO must give 30 days written notice before changing any loan term. Interest a SACCO can recover on a delinquent loan may not exceed the amount owing when the loan became delinquent. A SACCO credit policy must state the method of calculating interest, and the lending terms must be disclosed to members.
Source: Regulations 36(1) to 36(6) of the Tier 4 Microfinance and Money Lenders (SACCO) Regulations 2020, SI 2020 No. 51. Checked 19 September 2026.
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Default penalties on digital loans Needs confirmationHalf the principal
Digital lending guidelines announced in August 2023 by UMRA with the Ministry of Finance and the Bank of Uganda cap default penalties at half of the loan principal, require online lenders to be licensed, ban threats and obscene language in debt recovery, and ban unsolicited bulk messages and random calls. Whether the guidelines were later gazetted as binding regulations was not confirmed, so treat the penalty cap as guidance until you have checked it.
Source: Daily Monitor report of the August 2023 announcement; gazetting not confirmed. Checked 19 September 2026.
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Who licenses lenders now Needs confirmationMinistry of Finance
Parliament passed the Tier 4 Microfinance Institutions and Money Lenders (Amendment) Bill on 6 November 2024, dissolving UMRA and moving its functions into the Ministry of Finance, Planning and Economic Development. The amendment was reported as assented to on 17 February 2025, but that date comes from secondary sources rather than the Gazette, and the name of the new department varies between them. The umra.go.ug site and its licensing portal were still online and still using the UMRA name on the check date.
Source: Parliament of Uganda record for the Bill; assent date from secondary sources only. Checked 19 September 2026.
The worked example this calculator is checked against
UGX 5,000,000 over 12 months at 3 percent a month
Flat rate. Interest is 5,000,000 times 0.03 times 12, so UGX 1,800,000. Total repayment is UGX 6,800,000 and the instalment is UGX 566,667 a month. That is the same cost as a reducing balance loan at about 5.0797 percent a month, an effective 81.23 percent a year, which is what the borrower is really paying.
Reducing balance, equal instalments. The instalment is UGX 502,310 a month and total interest is UGX 1,027,725, so UGX 6,027,725 is repaid. The first month's interest is UGX 150,000 and the first principal payment is UGX 352,310; by the last month the interest is UGX 14,630 and the principal is UGX 487,680.
Reducing balance, equal principal. Principal is UGX 416,667 a month. The first payment is UGX 566,667 and the last is UGX 429,167, and total interest is UGX 975,000, so UGX 5,975,000 is repaid.
The gap. Flat rate costs UGX 772,275 more than reducing balance with equal instalments, about 1.75 times the interest, and UGX 825,000 more than equal principal. At 3 percent a month the nominal annual rate is 36 percent and the effective annual rate on a reducing balance loan is 42.58 percent.
Against the cap. 3 percent a month is above the 2.8 percent monthly cap for licensed money lenders, so that example rate is only lawful for a lender the cap does not cover, such as a SACCO. At the cap, the same loan on a reducing balance with equal instalments is UGX 496,332 a month with UGX 955,987 of interest. The cap read as a yearly figure is 33.6 percent simple, or 39.29 percent compounded month on month.
When the answer changes
The calculator prices an ordinary monthly loan. These are the things that move the number, and they are the same things that cause arguments at the counter.
A fee changes the true cost, not the instalment. A 2 percent processing fee on UGX 5,000,000 is UGX 100,000 the borrower never sees but repays in full. Put it in the fee box and watch the effective annual rate move while the instalment stays where it was. That is why two lenders quoting the same rate can be a long way apart.
Interest charged on a shorter cycle costs more. A rate quoted a week or a day compounds far faster than the same figure a month. Convert it to a monthly figure before you compare anything, and be careful with a lender that quotes a rate per period without saying what the period is.
Early repayment. On a reducing balance loan, paying early cuts the interest because interest follows the balance. On a flat rate loan it usually does not, because the interest was fixed at the start. For a SACCO member the Regulations say a loan may be repaid early, in whole or in part, on any business day without being charged the full term interest.
A grace period on principal. If the first few months carry interest only, the balance does not fall in those months, so the total interest is higher than this calculator shows even though the rate is the same.
Default. The Act does not let a money lending contract raise the rate or the amount because of a default. After a default, only simple interest on the overdue sum may be charged, and compound interest is illegal and unenforceable. For SACCOs, interest recovered on a delinquent loan may not exceed the amount owing when the loan went delinquent.
Rounding. The figures here are rounded to the shilling for display and computed at full precision underneath. A lender that rounds every instalment up to the nearest thousand will collect slightly more than the total shown, usually with a smaller final payment to square it off.
When the schedule stops fitting in a spreadsheet
One loan is arithmetic. A hundred loans is a system. The work that breaks a spreadsheet is not the instalment, it is everything around it: a receipt for every repayment, a ledger of each disbursement date, principal, rate and payment, an ageing report when a manager asks which loans are late, and a schedule that reprices itself when a borrower pays early or misses a month. The law already asks for most of that: section 87 requires a receipt immediately for every repayment and a record of every payment with its date.
The Growth Informer Loan and SACCO Management System is the loan, savings, shares and SACCO system we configure and build for each lender. We will be straight with you: we have not shipped a production loan system for a client yet, and we will not pretend otherwise. What we have built and run is financial software that moves real money, Moyo Pay, our own dual currency wallet on a double entry ledger with Mobile Money and USSD, and Growth Informer Business, our own live cloud POS, inventory and business platform. Across all our work that is 37 live website and app builds you can open on our portfolio page, and over USD 100k of client ad spend managed.
You get a fixed quote before work starts, pay on a 50/25/25 plan, and own the source code and your data outright. Message us on WhatsApp and we reply within 6 hours, then set up a meeting for the next day. If you are still at the licensing stage, start with how to start a money lending business in Uganda, and if you are already lending, loan management system in Uganda sets out what the software has to do.
Common questions
There are two methods in common use. Flat rate charges interest on the original amount for the whole term, so the interest never falls as you repay: interest is the loan amount times the monthly rate times the number of months. Reducing balance charges interest only on what is still owed, so it falls every month as the principal comes down. On the same quoted rate, flat rate always costs more. On UGX 5,000,000 over 12 months at 3 percent a month, flat rate costs UGX 1,800,000 in interest while reducing balance with equal instalments costs UGX 1,027,725, a difference of UGX 772,275.
Legal Notice No. 21 of 2024 caps the interest a licensed money lender may charge at 2.8 percent a month, which is 33.6 percent a year. It was issued by the Minister of Finance in consultation with UMRA under the Tier 4 Microfinance Institutions and Money Lenders Act, and the UMRA website states the same 2.8 percent figure. The cap reaches licensed money lenders only: the Act excludes cooperative societies from the definition of a money lender, so it does not apply to SACCOs. Charging above the cap is an offence carrying a fine of up to 50 currency points, which is UGX 1,000,000, possible cancellation of the licence and an order to refund the excess. Checked 19 September 2026.
Flat rate works the interest out once, on the amount first borrowed, and charges the same slice every month to the end of the term. Reducing balance works it out each month on the balance still outstanding, so it shrinks as the loan is repaid. Two loans quoted at the same rate are therefore not the same loan. A flat rate of 3 percent a month on UGX 5,000,000 over 12 months costs the same as a reducing balance loan at about 5.08 percent a month, an effective 81.23 percent a year. Compare the total interest and the effective annual rate, never the quoted rate on its own.
For equal instalments the formula is A equals P times r divided by 1 minus (1 plus r) to the power of minus n, where P is the loan amount, r is the monthly rate as a decimal and n is the number of months. Every instalment is the same size, but the early ones are mostly interest and the later ones are mostly principal. For equal principal you repay P divided by n of the principal each month and add interest on the balance still owed, so the payments start high and fall each month. Equal principal costs the least interest of the three methods on this page.
No. The whole calculator runs in your browser, nothing you type is transmitted, and no email address is asked for. If you choose to send us the result on WhatsApp, the figures are written into the message so you do not have to retype them, and you can edit or delete any of it before you press send.
Every loan priced
the same way
Tell us what you lend, how you price it and how you keep the schedule today. We will scope a loan system that issues the receipts the law asks for, holds one repayment ledger and produces the schedule, the ageing and the portfolio reports from the same figures, and give you a fixed quote before any work starts.
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