Ghanaian lenders quote two different things and call both “the rate”. The difference is roughly double, and it is not always volunteered.
Ghana loan repayment calculator
Monthly repayments and total interest on a loan, and what a flat rate really costs compared with a reducing balance.
Reducing balance against flat rate
Reducing balance charges interest on what you still owe. As you repay, the interest portion of each payment falls. This is how a mortgage works, and how an honest quote is expressed.
Flat rate charges interest on the original amount, every month, for the whole term — including the final month, when you owe almost nothing. A flat rate of a given number costs close to twice what the same number costs on a reducing balance.
Ask which one, and get the cedi figure
“Two per cent a month” means nothing until you know which basis it is on. The question that cuts through it: what is the total amount repayable, in cedis? A lender who will not put that in writing is telling you something.
What else to check before signing
- Processing and arrangement fees, and whether they come out of the money before you receive it
- Compulsory credit insurance, and what it costs
- Early repayment: is there a penalty, and does paying early actually save interest? On a flat-rate loan it often does not
- Late payment charges and how they compound
- What is being used as security, and what happens to it if you miss payments
Before you borrow at all
A susu scheme, a credit union, or a workplace loan will usually beat a consumer lender. And check that whoever is lending is licensed by the Bank of Ghana — a lender operating outside the regulated system is also outside the complaints process you would need later.
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