Personal Loan Flat Rate to Effective Rate Calculator

Convert a personal or vehicle-title loan's flat rate into the effective yearly rate on a reducing balance, including fees deducted at drawdown, and compare with the Bank of Thailand cap.

A flat rate charges interest on the full principal for the whole term: total interest = principal × rate × months ÷ 12; payment = (principal + interest) ÷ months. The effective rate is the monthly rate i at which all payments are worth the cash actually received after fees, × 12, for comparison with the BOT reducing-balance cap that covers interest, penalties, service charges and fees combined.

Hand check: THB 100,000 repaid in one month at a 12% flat rate is THB 101,000, a 1% monthly or 12% yearly rate. Over many payments the effective rate approaches twice the flat rate, because the balance falls each month while interest is still charged on the full amount.

For level monthly payments starting at the end of the first month. Insurance or charges collected later are excluded; add them to fees to see their effect. Caps apply to BOT-supervised lenders, not informal lending.