What is Loan Interest?
Loan interest is the cost you pay to a bank for borrowing money. It is typically expressed as an annual percentage of the principal amount.
Equal Payment Formula (Annuity)
Formula: Monthly Payment = P × r × (1+r)^n / ((1+r)^n - 1)
- P = Loan amount
- r = Monthly interest rate (annual rate ÷ 12)
- n = Number of payments
Example: 3M Baht Home Loan, 5% p.a., 30 Years
Monthly payment ≈ 16,104 THB
Total interest over the loan ≈ 2,797,440 THB
Tips to Save on Interest
- Pay more than the minimum each month to reduce principal faster
- Refinance when interest rates drop
- Choose a shorter loan term if you can afford higher payments
Use our free loan calculator to compute instantly!