A Better Understanding of Reducing Balance Interest
with smart tips to help you reduce costs and repay faster.
What type of interest doesNgern Tid Lor use for vehicle title loans
Ngern Tid Lor's vehicle title loans use reducing balance interest, in line with government policy. Interest is calculated based on the actual loan amount and charged on the outstanding principal balance in each installment. Every repayment covers both interest and principal. In the early stages, a larger portion goes toward interest. As the principal balance decreases over time, the interest charged becomes lower, while more of each repayment goes toward reducing the principal.
Example
Uncle Chai's Loan with Ngern Tid Lor
Loan Amount
20,000THB
Reducing Balance Interest at
24%/ Year
Repayment Term
12Months
Simple Tips
Help You Plan Your Repayments and Save More on Interest
Choose a Longer Repayment Term
Choose a monthly installment lower than what you think you can afford. For example, if you can pay 1,000 THB/month, select 800 THB/month instead. This keeps a buffer for emergencies and helps you maintain a good repayment history.
Make Extra Payments When Possible
Pay additional amounts to reduce your outstanding principal. The more principal you pay down, the lower your interest will be in subsequent installments — and you may pay off the loan ahead of schedule.
Pay Off Early If You Have a Lump Sum
If you have enough funds, pay off your loan early. Interest will be calculated only on the remaining principal as of your payoff date, with no prepayment penalty.
Important Things to Know About Reducing Balance InterestWhat happens if you miss a payment?
Late or missed payments may result in additional interest on the outstanding principal balance, which can increase your total repayment
amount. Continued non-payment may also lead to extra charges and a longer repayment period.
Borrow only as much as necessary and within your repayment capacity. Interest rate: 24% per annum (as of 18 April 2025).