How this loan calculator works
Reducing balance means each month you pay interest on the remaining principal. As the balance falls, the interest portion of the payment usually falls too.
We take your annual rate, convert it to a monthly rate, and estimate a level monthly payment (similar to a standard amortizing loan formula).
The schedule shows how each payment splits into principal and interest, and the remaining balance after each period.
Example calculation
Try THB 1,000,000 at 6.5% per year for 20 years (240 months). The tool shows an approximate monthly payment and the first rows of the schedule.
Early payments are often mostly interest; later payments pay down principal faster — typical of reducing-balance loans.
Frequently asked questions
- Does this loan calculator use reducing balance interest?
- Yes. This calculator uses reducing balance interest, which means interest is calculated on the remaining loan balance each period. That is why the interest portion usually falls over time while the principal portion grows.
- Why is the first payment mostly interest?
- At the start of the loan, your remaining balance is at its highest, so interest is also highest. As you pay down the balance, more of each monthly payment goes toward principal.
- Why might the result differ from a bank or finance company quote?
- Different lenders may use flat rate products, different rounding rules, fees, insurance, or day-count methods. This calculator is a useful planning estimate, but it is not an official loan offer.
- What happens if the interest rate is 0%?
- If the rate is 0%, the monthly payment is simply the loan amount divided by the number of payments. In that case, every payment goes fully toward principal with no interest charge.
- How is this different from the mortgage or car loan calculator?
- This is a general-purpose loan calculator for a simple loan amount, rate, and term. The mortgage and car loan tools are better when you want to start from property price or car price, include down payment, and compare loan styles.