Weekly Loan Calculator
This calculator works out the repayments on weekly-instalment agreements using a flat rate of interest per annum. The APR is shown too, which is the fairer way to compare agreements.
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Overview
This calculator works out the repayments on agreements paid weekly rather than monthly. The method is the same flat-rate approach as the standard loan calculator, where interest is charged on the whole amount of credit for the whole term, but the term is counted in weeks and the APR is compounded over the 52 weeks in a year. Enter the cash price, any deposit, the term in weeks and the flat rate to get the weekly instalment, the total charge for credit and the APR.
Weekly agreements are common in rent-to-own and sub-prime lending, where a modest-sounding flat rate can hide a very high APR once it's annualised over 52 weekly payments. Working out the APR puts a real number on that cost, and lets you compare a weekly deal against a monthly one.
How it works
Cash price, deposit, the term in weeks and the flat rate of interest, plus any arrangement or option-to-purchase fee.
The amount of credit is the cash price less the deposit. Interest is the credit multiplied by the flat rate and the number of weeks divided by 52. Fees go on top.
The total is spread across the weeks to give the weekly instalment, and the APR is compounded over 52 periods so it's comparable with a monthly agreement.
Worked example
£4,500 of credit over 104 weeks at 12.5% flat
Take a £5,000 cash price with a £500 deposit, leaving £4,500 of credit over 104 weeks (two years) at a 12.5% flat rate, plus a £100 arrangement fee spread across the payments. The calculator returns a first instalment of £55.05, a total charge for credit of £1,125.20 and a total amount payable of £6,225.20.
The APR works out at 28.2%, far above the 12.5% flat rate, because interest is charged on the full £4,500 even as you pay it down over the two years.