Quick answer
Declining balance: each month you repay the same principal (loan ÷ months) plus interest on the remaining balance, so the first payment is the largest and payments shrink. Equal payments: every month you pay P × r ÷ (1 − (1 + r)^−n), where r is the monthly rate. Borrowing VND 1bn at 10% over 20 years: declining balance starts at VND 12.5m; equal payments are VND 9,650,216 a month.
Declining balance vs equal payments: what's the difference?
This calculator builds a detailed repayment schedule for a home, car or personal loan: choose declining balance or equal monthly payments, add a promotional rate followed by a floating rate, or a few months of principal grace. You see the first payment, the highest month, total interest and every instalment, with a CSV export for Excel.
How to build a repayment schedule
- 1
Enter the loan amount (500,000,000 or 500m), the annual interest rate and the term in months (240 months = 20 years).
- 2
Choose “Declining balance” (equal principal, falling interest) or “Equal monthly payments” (same total each month).
- 3
If the bank offers a promotional first-year rate, open “Promotional rate, principal grace period”: enter the months and promo rate; the main rate is then the expected floating rate afterwards.
- 4
If you have a principal grace period, enter the number of interest-only months.
- 5
Read the four summary figures and the schedule; “Show all … months” expands it and “Download CSV” saves it for Excel.
Two repayment methods: VND 1bn at 10% over 20 years
| Figure | Declining balance | Equal payments |
|---|---|---|
| First payment | VND 12,500,000 | VND 9,650,216 |
| Last payment | VND 4,201,309 | VND 9,650,571 |
| Total interest | VND 1,004,166,588 | VND 1,316,052,195 |
| Best when | Income is high from the start and you want less interest | You want a stable monthly amount that is easy to budget |
Monthly interest = opening balance × 10% ÷ 12. Equal payments cost about VND 312m more interest because principal is repaid more slowly in the early years.
Effect of a promotional rate followed by a floating rate
| Scenario (1bn, 20 years, equal payments) | First 12 months | From month 13 | Total interest |
|---|---|---|---|
| Fixed 10% | VND 9,650,216 | VND 9,650,216 | VND 1,316,052,195 |
| 6.5% for the first year, then 10.5% | VND 7,455,731 | VND 9,885,714 | VND 1,343,411,409 |
Swipe sideways to see the whole table →
A first-year promotion lowers early payments, but if the floating rate is high the total interest can end up above a fixed-rate loan.
Examples
Car loan: VND 500m over 5 years at 9%
Declining balance: first payment VND 12,083,333, total interest VND 114,375,000. Equal payments: VND 10,379,178 a month, total interest VND 122,750,649.
Six months of principal grace
VND 300m at 8% over 36 months, declining balance, 6 months' grace: interest-only payments of VND 2,000,000 for six months; month 7 is 10m principal + 2m interest = VND 12,000,000; total interest VND 43,000,000.
Checking affordability
Many banks want total monthly debt payments to stay below roughly 50–70% of income. Compare the “Highest monthly payment” with your take-home pay (see the Gross ↔ Net Salary Calculator).
What people often miss
- Looking only at the first payment of a promotional package.
- Add the floating period with an expected rate (often the bank's base rate + a 3–4% margin) to see the highest payment and the real total interest.
- Thinking equal payments mean equal interest each month.
- The total is the same, but the interest share falls and the principal share rises. Check the “Principal” and “Interest” columns.
- Forgetting early-repayment fees and loan insurance.
- The calculator does not include them; ask the bank and add them when comparing loans.
How the calculator works
Interest per period = opening balance × annual rate ÷ 12, rounded to the dong. A real contract may use actual days ÷ 365, so each instalment can differ by a few thousand dong.
Equal payments use the annuity formula on the remaining balance and months, recalculated when principal repayments start and whenever the rate changes. The final instalment clears whatever is left, so it can differ by a few dong because of rounding.
Glossary
- Declining balance
- Equal principal each period with interest on the remaining balance, so the total payment falls over time.
- Equal payments (annuity)
- The same total each period, combining principal and interest; the principal share grows while the interest share shrinks.
- Floating rate
- A rate reset periodically to the bank's base rate plus the margin in the contract.
- Principal grace period
- A period in which you pay interest only and no principal.
Frequently asked questions
What is the monthly payment on VND 1bn over 20 years?
At 10% a year: VND 9,650,216 with equal payments; with declining balance the first payment is VND 12,500,000 and then falls. Enter your actual rate for an exact figure.
Declining balance or equal payments?
Declining balance costs less interest overall but the early months are heavier. Equal payments start lighter and stay stable, at the cost of more total interest.
Is repaying early worth it?
Usually, because interest is charged on the remaining balance. Many banks charge an early-repayment fee, often 1–3% of the amount repaid in the first few years.
Why does the bank's schedule differ?
The bank may charge interest on actual days ÷ 365, use payment dates that are not the 1st of the month, or apply a different floating rate than you assumed.
Will the CSV show Vietnamese characters correctly in Excel?
Yes, it is saved as UTF-8 with a BOM, so Excel displays Vietnamese text correctly.
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