Understanding amortising loans & interest

On Crowd2Fund, Loans and Revenue Loans are amortising loans. Amortisation refers to the maths behind how a repayment is calculated. It consists of both interest and the initial capital that was loaned.

Based on the amount of the loan, the interest rate, and the term of the loan, you can determine the amount of the repayment each month, and how much total interest should be earned.

How amortisation works

While the amount of each monthly payment is identical, the interest component of each payment will decrease each month and the principal component of each payment will increase until the end of the loan. Here is a breakdown of a £5,000 loan over 5 years at 9% APR.

Amortisation formula

Amortisation formula


Crowd2Fund offers three lending products, helping our investors choose the level of risk that suits you best. Repayments from businesses are made on a monthly basis, directly into your account. You can see the detail of each repayment from the repayments table in your account.


A loan is an amortising fixed repayment loan where each repayment is made on a monthly basis and consists of both interest and principle.

Interest-Only Loans

An Interest-Only loan is not an amortising loan. The capital is repaid at the end of the term in a 'bullet’ repayment.

Reinvesting Repayments

When you receive a repayment consisting of both interest and capital, some of the initial capital you lent has been repaid.

Top tip

If you want to maximise the amount of interest you are earning it's important to re-invest the repayment into another opportunity.

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Past performance and forecasts are not reliable indicators of future results. Your capital invested is not covered for compensation in the event of a loss by the FSCS. Tax treatment will depend on the individual circumstances and may be subject to change. Please see our Risk section before making an investment decision.