CHIT FUNDS · CALCULATOR 01

Chit Fund Real Interest Rate Calculator

Chit funds blend borrowing and saving into a single pot. This calculator computes your true borrowing APR (as a bidder) or real XIRR return (as a saver), comparing it directly against personal loans and bank fixed deposits.

Illustration of chit fund committee drawing winning lot

1. Select Your Role in the Chit

2. Chit Group Details

₹5,00,000
₹50K₹25 Lakh₹50 Lakh
25 Months
10 Months25 Months50 Months60 Months
Month 4
Month 1 (Highest cost)Month 25
25% (₹1,25,000)
5% (Foreman only)25% (Standard)40% (Legal cap)
5% (₹25,000)
2%5% (Standard)7%
Nominal Installment
₹20,000
Prize in Hand
₹3,75,000
Total Paid by You
₹4,54,000
BORROWER VERDICT

Winning in Month 4, your effective borrowing rate is

29.8% APR
your chit APRpersonal loan 11.5%

Borrowing in Month 4 costs 29.8% effective APR. A standard bank personal loan at 11.5% is cheaper by 18.3 percentage points.

Inline Math Proof · How This Is Calculated

We solve for the exact Internal Rate of Return (IRR) across all 25 irregular monthly cash flows, treating the winning month's prize as an inflow (+₹3,75,000) and monthly installments as net outflows after dividend discount.

Foreman Commission = ₹5,00,000 × 5% = ₹25,000
Bid Discount Pool = ₹5,00,000 × 25% = ₹1,25,000
Net Dividend Distributed = Discount Pool - Foreman Commission

Month-by-Month Cash Flow Schedule

Complete breakdown of nominal due, distributed dividend, and net outflow.

MonthNominal DueDividend CreditNet OutflowNet Cash Flow
Month 1 ₹20,000₹0₹20,000₹-20,000
Month 2 ₹20,000₹3,833₹16,167₹-16,167
Month 3 ₹20,000₹3,667₹16,333₹-16,333
Month 4 PRIZE WON₹20,000₹3,500₹16,500+₹3,58,500
Month 5 ₹20,000₹3,333₹16,667₹-16,667
Month 6 ₹20,000₹3,167₹16,833₹-16,833
Month 7 ₹20,000₹3,000₹17,000₹-17,000
Month 8 ₹20,000₹2,833₹17,167₹-17,167
Month 9 ₹20,000₹2,667₹17,333₹-17,333
Month 10 ₹20,000₹2,500₹17,500₹-17,500

Showing first 10 of 25 total months. Full cashflow series evaluated for exact XIRR convergence.