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Early repayment looks complicated at first, but the math is actually very simple. Here is how it works.

The simple formula

Early settlement amount equals the principal, plus the markup that has built up so far, plus a portion of the markup that has not yet built up.

The portion of the unbuilt markup you still pay depends on the product:

• ACL, ABF, SF: you save 50% of the unbuilt markup, so you pay 50% of it

• ASF, ASFX: you save 100% of the unbuilt markup, so you pay 0% of it

Step by step

• Step 1. Find the principal you drew

• Step 2. Calculate how much markup has built up by the day you repay

• Step 3. Calculate how much markup would still build up if you waited until the end

• Step 4. Apply the reward to the markup that has not yet built up

• Step 5. Add it all together

Worked example

Say you drew KES 500,000 on Agri Buyer Financing for 28 days. Daily markup is 0.23%, so the total 28 day markup is 6.44%, or KES 32,200. You decide to repay on day 14.

• Principal: KES 500,000

• Markup built up over 14 days: 0.23% multiplied by 14, which is 3.22%, equal to KES 16,100

• Markup not yet built up for remaining 14 days: KES 16,100

• Reward for ABF: 50% of KES 16,100, which is KES 8,050

• Portion of unbuilt markup still owed: KES 16,100 minus KES 8,050, which is KES 8,050

• Early settlement amount: KES 500,000 plus KES 16,100 plus KES 8,050, which is KES 524,150

An installment paid early

If you have a multi-installment product like Agri Credit Line on a 60 or 90 day term, and you want to pay just one installment early, the same idea applies. The reward is calculated only on the part of the markup linked to that installment that has not yet built up.

We do the math for you

You do not need to calculate this yourself. Just request an early settlement quote and we will give you the exact amount.