AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
To compare two loan offers with different structures, work out the total cost of each (everything you repay minus what you receive), then divide by the average thousands of naira you owe and by the number of months. The offer with the lower cost per ₦1,000 per month is the cheaper price for credit, even if its total cost is higher.
Real loan offers rarely line up neatly. One app quotes 15% for 30 days with a fee added on top. A bank quotes a monthly rate for three months and deducts a fee before paying you. A cooperative quotes a flat yearly rate. Trying to compare the headline percentages is how borrowers end up with the more expensive loan. A single comparison number fixes that.
The method in four steps
- Amount received: the naira that actually lands in your account, after any fee deducted upfront.
- Total repaid: every instalment, plus any fee paid separately, plus compulsory insurance.
- Total cost: total repaid minus amount received.
- Cost per ₦1,000 per month: total cost ÷ (average balance owed ÷ 1,000) ÷ months.
For a single repayment at the end, the average balance is simply the amount received. For equal instalments, average the balance you owe at the start of each month.
Worked example: two offers for ₦200,000
Labelled example. Offer A: ₦200,000 for 30 days at 15%, plus a ₦4,000 fee added to the repayment. Offer B: ₦200,000 for three months at 6% a month worked on the original amount (flat), with a 2% fee deducted, repaid in three equal instalments.
| Example | Offer A | Offer B |
|---|---|---|
| Amount received | ₦200,000 | ₦196,000 |
| Repayments | ₦234,000 once | ₦78,666.67 x 3 = ₦236,000 |
| Total cost | ₦34,000 | ₦40,000 |
| Average balance owed | ₦200,000 | about ₦133,333 |
| Months | 1 | 3 |
| Cost per ₦1,000 per month | ₦170 | about ₦100 |
Offer B costs ₦6,000 more in total, but you hold the money three times as long, and the price per ₦1,000 per month is much lower. If you need the money for three months, Offer B is the cheaper credit. If you only need it for 30 days, Offer A is cheaper in total, because Offer B would charge you for two months you do not need, and early repayment may not reduce a flat charge.
The shortcut most people take, and why it misleads
Dividing Offer B's ₦40,000 cost by ₦200 (the full ₦200,000) and by three months gives about ₦67 per ₦1,000 per month. That looks even better, but it is wrong: you repay a third of the loan after one month, so you do not owe ₦200,000 throughout. A precise internal-rate calculation puts Offer B at about 9.9% a month on the money you actually hold, which matches the ₦100 figure from the average-balance method. Flat-rate instalment loans always look cheaper than they are if you skip the averaging.
What to include, and what not to
- Include: interest, processing or management fees, compulsory insurance, and any charge that applies if you repay on time.
- Exclude from the comparison, but read carefully: late fees and penalty interest. They do not apply if you pay on time, but compare how harsh they are, because a missed payment changes everything.
- Count fees deducted upfront by reducing the amount received, not by adding them to the cost twice.
Two related guides: How to convert a monthly interest rate to a yearly rate, and APR vs flat fee: what a loan really costs.
Comparing three or more offers
The method scales. Put each offer in its own column with the same five rows: amount received, total repaid, total cost, average balance and months. Then rank by cost per ₦1,000 per month. Before choosing the cheapest, cross out any offer whose tenor does not match when your repayment money will arrive. A cheap 30-day loan you cannot repay in 30 days is not cheap, because the late charges and rollover cost will overwhelm the saving.
Repaying early changes the comparison
If you might repay early, ask each lender how early settlement is calculated. On a reducing-balance loan, interest usually stops on the principal you clear. On a flat-rate loan, the agreement may charge the full interest regardless, or offer only a partial rebate. A loan that is slightly dearer on paper but lets you stop interest the day you repay can work out cheaper in practice. Our guide Does early repayment reduce interest? covers the common methods.
Where to find the figures
For app-based lenders, the FCCPC's 2025 consumer lending regulations require interest rates, repayment terms and fees to be disclosed before any transaction, and current rates and charges to be displayed on the lender's platforms. Bank offers carry the figures in the offer letter; Sterling Bank's public loans page (checked October 2026), for example, lists interest per annum alongside separate management and insurance percentages, which is the level of detail you need. If an offer does not show the amount received and total repayable, ask for both in writing. Confirm an app lender is on the FCCPC's approved register before accepting.
Where Pryme fits
A Loans on Spaces agreement from Solid Allianze MFB shows the amount, cost and repayment date before you accept, which gives you the three inputs this method needs. Your Personal Assistant can help you keep track of the repayment date once you have accepted; nothing moves without your approval.
Questions people ask
How do I compare two loans with different interest rates?
Convert both into total cost, then into cost per ₦1,000 per month based on the money you actually hold. The lower figure is the cheaper credit.
Should I pick the loan with the lower total repayment?
Only if both last the same time. A loan that costs more in total but lasts longer can be cheaper per month.
Does a fee deducted upfront make a loan more expensive?
Yes. You receive less but repay the full amount, so the cost per naira you use goes up.
What is cost per ₦1,000 borrowed?
It is the naira you pay in interest and fees for each ₦1,000 you owe, usually per month. It lets you compare loans quoted in different ways.
Sources
- FCCPC: Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025 (made 21 July 2025) · accessed Oct 2026
- Sterling Bank: Loans (payroll, vehicle, home and SME loan terms) · accessed Oct 2026
- FCCPC: approved digital lenders register (via the FCCPC website) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.