Weekly Loan Calculator
This calculator works out the repayments on weekly-instalment agreements using a flat rate of interest per annum. In addition to the repayments, the resulting APR is also provided so agreements can be compared fairly.
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Overview
The weekly loan calculator works out the repayments on agreements paid weekly rather than monthly. It uses the same flat-rate method as the standard loan calculator — interest is charged on the whole amount of credit for the whole term — but the term is expressed 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 flat rate can translate into a strikingly high APR once it is annualised over 52 weekly payments. Deriving the APR makes that real cost visible, so weekly deals can be compared with monthly ones on the same basis.
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 are added on top.
The total is spread across the weeks to give the weekly instalment, and the APR is compounded over 52 periods so it is 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 — £4,500 of credit — over 104 weeks (two years) at a 12.5% flat rate, with 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 the flat rate is charged on the full £4,500 even as you pay it down across the two years.