A Flat 20 Percent for a Fortnight: What That Actually Costs Over a Year
Summary
A flat 20 percent for a fortnight is not 20 percent a year: with a 10 percent fee taken off the top it costs about 33 percent of the cash you actually receive every 14 days, which annualises to roughly 869 percent on a simple basis. A fortnight has 26 of itself in a year, and that multiplier is the whole story.
A flat 20 percent for a fortnight is nowhere near 20 percent a year. A year holds about 26 fortnights — 365 divided by 14 is 26.07 — and that multiplier turns a modest-looking charge into one of the most expensive forms of credit there is. Add the 10 percent administration fee deducted before the money is sent and the documented 14-day advance costs about 33 percent of the cash you actually received. Annualised on a simple basis, that is roughly 869 percent a year. The flat figure is not wrong; it answers a different question from the one you need answered.
What does "flat" actually mean on these advances?
A flat charge is a fixed percentage of the amount approved, for the whole term. It does not accrue day by day and does not shrink if you repay sooner:
- 20 percent of the amount approved over 14 days.
- 30 percent of the amount approved over 30 days.
- Plus an administration fee of 10 percent of the amount approved, deducted before the money is sent.
Those are charges for the term, not annual rates. That is the sentence that does the damage, because anyone used to bank rates quoted per year reads "20 percent" and files it next to "20 percent a year". The two differ by a factor of about twenty-six.
How do you turn a fortnightly charge into a yearly figure?
Three steps; the first is usually skipped.
- Work out the cost in dollars. On USD 100 approved for 14 days: fee USD 10, so you receive USD 90; interest USD 20, so you repay USD 120. Cost 120 − 90 = USD 30.
- Divide by the cash you actually received, not by the amount approved: 30 divided by 90 = 33.3 percent for 14 days.
- Multiply by the number of those periods in a year: 365 divided by 14 = 26.07, so 33.3 percent x 26.07 = about 869 percent a year on a simple, non-compounded basis.
Two side calculations show what the headline leaves out. The quoted 20 percent, annualised the same way, is about 521 percent a year. And splitting the real cost: interest alone is 20 on 90 received, about 22.2 percent per fortnight, the fee alone 10 on 90, about 11.1 percent. A third of the real cost is the fee, the part no advertised rate contains.
Rolled over every fortnight for a year the charges would compound: 1.333 to the power of 26.07 is about 1,809 times the starting amount, roughly 180,000 percent. That is theoretical, not a prediction. Run these on your own numbers in the Zimloan: App Loan SIM app, an independent, unofficial calculator that reports flat rate against real rate fortnightly, monthly and yearly.
What about the 30-day version?
The documented 30-day combination is 30 percent interest plus the 10 percent fee. On USD 100 approved: fee USD 10, receive USD 90, repay USD 130, cost USD 40. That is 40 on 90, or 44.4 percent for the month.
- A year holds 365 divided by 30 = 12.17 such months, so 44.4 percent x 12.17 = about 541 percent a year simple.
- Compounded for a year, 1.444 to the power of 12.17 is about 88 times the starting amount, roughly 8,700 percent. Again theoretical.
- The quoted 30 percent, annualised simply, is about 365 percent a year.
So the 30-day advance has the higher cost for the term (44 percent against 33 percent) but the lower cost per day, because you keep the money twice as long for less than twice the charge.
Why can the cheaper-looking fortnight cost more?
Because the fee is charged again every time you borrow again. Compare bridging a month two ways, with USD 100 approved each time:
- Two separate 14-day advances. Each costs USD 30 (USD 10 fee plus USD 20 interest), so USD 60 across 28 days.
- One 30-day advance. USD 10 fee plus USD 30 interest = USD 40 across 30 days.
Taking the month a fortnight at a time costs USD 20 more for two days less use of the money. Per day: the 14-day advance costs 30 divided by (90 x 14) = about 2.4 percent of the cash received per day, the 30-day advance 40 divided by (90 x 30) = about 1.5 percent. Repeat borrowing is where a flat fee does the most damage, because the fee has no relationship to time.
Which figure should you use when deciding?
- Can I afford this at all? The cost in dollars for the term, next to what you will be paid on the repayment date.
- Is this better than a bank loan or an employer advance? The annualised figure, because that is the only basis on which a yearly rate and a fortnightly charge are comparable.
- Which of two advances is cheaper? Cost divided by cash received, divided by days. It neutralises different terms, fees and headline rates.
The published figures are illustrations, not offers: collected on 25 August 2026 from publicly available information, and only the agreement you sign decides what you owe. Before going further with any quote, check that the lender is a registered microfinance institution with the Reserve Bank of Zimbabwe at rbz.co.zw.
Frequently asked questions
Is 20 percent for a fortnight the same as 20 percent APR?
No, and the difference is about twenty-six-fold. An APR is a yearly figure; a flat fortnightly charge has to be multiplied by the number of fortnights in a year before the two are in the same units at all.
Does the annualised figure mean I will actually pay 869 percent?
No. You only pay the charge for the term you borrow. On a single 14-day advance of USD 100 approved you pay USD 30, not several hundred dollars. The annualised figure exists so you can compare against products quoted per year.
Why is my effective rate higher than the rate I was quoted?
Because the fee is deducted before the money is sent, so charges are calculated on the amount approved while you only ever have the smaller amount to spend. The quoted rate is measured against the larger number.
Never compare a fortnightly flat charge with an annual rate, always divide the cost by the cash you actually received, and treat a second advance in the same month as a warning rather than a solution. To test these figures on your own amount and term, the independent, unofficial app on Google Play does the arithmetic offline. It is not a lender and not a broker, and not affiliated with, endorsed by or connected to ZimLoan, Lemontree Technology Private Limited, or any other lender. It accepts no loan application and cannot arrange, influence or check a loan; it does not release money, check application status or access any account. Questions about an actual loan go to your own lender.
