Loan Calculator
Month-by-month amortization for an equal-payment or reducing-balance loan, with the total interest it costs.
Amortization schedule
| Month | Opening balance | Principal | Interest | Payment | Closing balance |
|---|---|---|---|---|---|
| 1 | 1,000,000,000 | 1,316,883 | 8,333,333 | 9,650,216 | 998,683,117 |
| 2 | 998,683,117 | 1,327,857 | 8,322,359 | 9,650,216 | 997,355,260 |
| 3 | 997,355,260 | 1,338,922 | 8,311,294 | 9,650,216 | 996,016,338 |
| 4 | 996,016,338 | 1,350,080 | 8,300,136 | 9,650,216 | 994,666,258 |
| 5 | 994,666,258 | 1,361,331 | 8,288,885 | 9,650,216 | 993,304,927 |
| 6 | 993,304,927 | 1,372,675 | 8,277,541 | 9,650,216 | 991,932,252 |
| 7 | 991,932,252 | 1,384,114 | 8,266,102 | 9,650,216 | 990,548,138 |
| 8 | 990,548,138 | 1,395,648 | 8,254,568 | 9,650,216 | 989,152,490 |
| 9 | 989,152,490 | 1,407,279 | 8,242,937 | 9,650,216 | 987,745,211 |
| 10 | 987,745,211 | 1,419,006 | 8,231,210 | 9,650,216 | 986,326,205 |
| 11 | 986,326,205 | 1,430,831 | 8,219,385 | 9,650,216 | 984,895,374 |
| 12 | 984,895,374 | 1,442,755 | 8,207,461 | 9,650,216 | 983,452,619 |
How it works
A loan has three inputs — amount, rate and term — but two very different repayment methods, and Vietnamese banks quote both.
The first is the annuity, or level payment. You pay the same amount every month for the whole term. Inside that fixed amount the split shifts: the early months are almost all interest, the late months almost all principal.
The second is the reducing-balance method ("dư nợ giảm dần"). You repay a fixed slice of the principal each month plus interest on whatever is still outstanding. Because the balance falls steadily, each payment is smaller than the last — highest in month one, lowest at the end.
At the same rate the reducing-balance method always costs less in total, because principal comes down faster and so less of it accrues interest. The trade is that the first payment is markedly higher — on a 20-year loan the gap can be 30%. The right question is therefore not "which is cheaper" but "can I afford the first year".
The schedule rounds every row to whole đồng and lets the final instalment absorb the accumulated drift, so the closing balance lands exactly on zero. Without that, a 20-year schedule ends a few thousand đồng out and looks wrong against a bank statement.
Formula
Annuity: PMT = P × r ÷ (1 − (1 + r)⁻ⁿ) • Reducing balance: payment k = P/n + (opening balance of month k × r)
P is the principal, n the number of months, r the monthly rate = annual rate ÷ 12. A 12% annual rate means r = 1% per month; this is the nominal convention banks quote, not an effective annual rate.
Worked example
Borrowing 1 billion đồng at 10% a year over 20 years (240 months):
- Monthly rate
- 10% ÷ 12 = 0.8333%
- Annuity — every month
- 9,650,216 đ
- Annuity — total interest
- ≈ 1.316 billion đ
- Reducing balance — first month
- 12,500,000 đ
- Reducing balance — final month
- 4,201,389 đ
- Reducing balance — total interest
- ≈ 1.004 billion đ
The reducing-balance method saves roughly 312 million đồng in interest, but demands 12.5 million in month one instead of 9.65 million. Which one suits you depends on your cash flow in the early years, not on the total alone.
Frequently asked questions
Which method is cheaper?
At the same rate, reducing balance always costs less in total interest because principal is repaid faster. But banks usually quote the two methods at different rates, so compare the total repayment in this schedule rather than the two headline percentages.
Why are the first payments almost all interest?
Interest each month is charged on the outstanding balance, and in month one that balance is essentially the whole loan. On 1 billion at 10%, the first month’s interest alone is 8.33 million out of a 9.65 million payment — under 1.32 million goes to principal.
Is a longer term better?
It lowers the monthly payment but raises total interest, and raises it steeply. A longer term is worth taking when the shorter one genuinely does not fit your budget, or when you intend to repay early.
Can I model a promotional first-year rate?
Not in a single run — this calculates one rate for the whole term. Run it twice: once at the promotional rate for the early payments, and once at the estimated floating rate (the reference rate plus the margin in your contract) for the rest.
What does early repayment cost?
Most contracts charge a prepayment fee in the first few years, typically 1–3% of the amount repaid early. Weigh that against the interest saved; in the early years, when the interest share is largest, repaying early usually still wins.
Does the total include fees?
No. This is principal and interest only. Valuation, notarisation, mortgage registration and loan insurance typically add another 1–2% of the loan up front.
How much should I borrow relative to income?
Lenders generally cap total debt service at 40–50% of income. To work backwards from income to a loan size, use the affordability calculator.