About this tool
The Cambodia Loan Offer Comparison Calculator lets you compare 2 to 4 loan offers side by side. Enter a common principal and term, then specify each offer's interest method (reducing balance or flat/simple), annual rate, and fees. The calculator shows monthly payment, total interest, total fees, total repaid, cash needed upfront, total cash cost, and an estimated effective annual rate — so you can see which offer truly costs less.
How it works
Reducing-balance loans charge interest on the outstanding balance each month, so interest decreases over time. Flat/simple-interest loans charge the same interest every month based on the original principal, making the total interest higher for the same advertised rate. The effective annual rate (EAR) is derived from the actual cash flows — what you receive at disbursement minus upfront fees, and what you repay each month including recurring fees — using Newton-Raphson iteration. If the solver does not converge (e.g. all cash flows are positive), the EAR shows "N/A" rather than a misleading number.
Use cases
- Comparing bank and MFI loan offers with different interest methods and fee structures
- Understanding why a lower flat rate can cost more than a higher reducing-balance rate
- Evaluating the true cost of upfront origination fees vs financed fees
- Checking whether recurring monthly fees significantly affect the effective annual rate
- Making an informed consumer-protection decision before signing a loan agreement
Frequently asked questions
What is the difference between reducing balance and flat interest?
Reducing-balance interest is calculated on the remaining principal each month, so interest decreases as you pay down the loan. Flat (simple) interest is calculated once on the original principal and divided equally across all months, so you pay the same interest every month even as the balance shrinks. For the same advertised annual rate, flat interest always costs more in total than reducing balance.
What is the effective annual rate (EAR)?
The effective annual rate is the true annual cost of borrowing, derived from the actual cash flows: what you receive at disbursement (minus upfront fees) and what you repay each month (including recurring fees). It accounts for the timing of payments and all fees, making it the most accurate way to compare offers with different structures. If the solver cannot converge, the calculator shows "N/A" instead of a misleading number.
How are upfront, financed, and recurring fees handled?
Upfront fees are paid in cash at disbursement and added to the total cash cost but not to the loan principal. Financed fees are added to the principal at disbursement, increasing the monthly payment and total interest. Recurring monthly fees are added to each monthly payment and included in the total repaid. The three fee types are never double-counted.
Does this tool recommend a specific lender or loan?
No. The calculator labels the offer with the lowest estimated total cash cost, but it never claims a lender is "best", approved, safe, or recommended. Results are estimates for consumer-protection comparison only, not an offer, eligibility decision, or credit advice.
Data and accuracy
Amortization formulas are standard financial mathematics. NBC legislation and Prakas index available at nbc.gov.kh. Cambodia Banking and Financial Institutions Code of Conduct context available at abc.org.kh. Method checked: 2026-08-26.