Loan Prepayment Calculator (VND)
Prepaying a loan means paying more than your fixed monthly instalment to shrink the principal faster. Because interest accrues on the outstanding balance, every dong of principal you clear early erases all the interest that dong would have carried over the remaining years. So consistent extra payments do two things at once: they shorten the loan and cut the total interest you pay. It is one of the safest returns available — paying down a loan at 10.5%/year is mathematically the same as earning a risk-free 10.5%/year.
There is a catch that trips up borrowers in Vietnam: the early-repayment penalty (phí trả nợ trước hạn). Almost every Vietnamese bank charges a fee — commonly 2% or more of the amount you repay ahead of schedule, steepest in the early years of the loan. That fee eats into your interest savings, so your real benefit is always smaller than the gross interest saved. This calculator models both sides — the interest you save and the penalty you pay — and reports the net saving so you can decide whether prepaying actually pays off.
Take the default scenario above: a 1.500.000.000 VND loan at 10.5%/year over 20 years carries a level instalment of about 14.975.698 VND a month. Adding 5.000.000 VND each month clears the loan in 10 years 3 months instead of 20 years — 9 years 9 months early — and cuts total interest by 1.140.361.529 VND. After a 2% penalty (around 12.235.903 VND on the principal repaid ahead of schedule), you still come out 1.128.125.626 VND ahead. Every figure here is produced by the calculator; enter your own loan terms for a result tailored to you.
How the calculator works out the net saving
Step 1 — The monthly instalment
A fully amortising loan uses the annuity payment formula:
M = P × r / (1 − (1 + r)^−n)
| Symbol | Meaning |
|---|---|
| M | Principal + interest per month (14.975.698 VND in the default scenario) |
| P | Opening loan balance (1.500.000.000 VND) |
| r | Monthly rate = annual rate / 12 (10.5% / 12) |
| n | Number of instalments = loan term in months (240) |
Step 2 — Two amortisation schedules
The tool runs two declining-balance schedules side by side:
- Without extra: pay exactly M every month for all 240 months. Total interest = M × n − P = 2.094.167.593 VND.
- With extra: pay M + your extra payment (5.000.000 VND) each month until the balance hits zero. The interest accumulated along this faster path falls to 953.806.064 VND, and the loan is cleared in 10 years 3 months.
Interest saved = without − with = 2.094.167.593 − 953.806.064 = 1.140.361.529 VND.
Step 3 — The early-repayment penalty
This is the part most calculators ignore. The bank charges the fee on the principal you repay ahead of schedule, so the model uses:
Penalty = penalty rate × total principal repaid early
In the default scenario the extra payments add up to 611.795.172 VND, so a 2% penalty is 12.235.903 VND. The bottom line:
Net saving = interest saved − penalty = 1.140.361.529 − 12.235.903 = 1.128.125.626 VND
Assumptions and limits
The model holds the rate fixed for the whole term (many VN loans float after a promotional period), applies the penalty as a flat rate on the amount prepaid (real banks often taper it by year — e.g. 2% in year 1, 1% by year 3, waived after year 5), and ignores other fees. Read your credit agreement: the prepayment fee schedule written there is the number that actually governs your decision.
Worked example: 1.500.000.000 VND at 10.5%/year over 20 years, 5.000.000 VND extra a month
Illustrative assumptions: a fixed 10.5%/year rate, a 2% early-repayment penalty on the principal repaid ahead of schedule, and a steady extra payment from month one until the loan clears.
| Metric | Without extra | With 5.000.000/month |
|---|---|---|
| Monthly payment | 14.975.698 | 19.975.698 |
| Time to clear | 20 years | 10 years 3 months |
| Total interest | 2.094.167.593 | 953.806.064 |
Four things stand out.
- You finish 9 years 9 months early. An extra 5.000.000 VND a month — a fraction of the 14.975.698 VND instalment — knocks nearly a third off the timeline.
- You save 1.140.361.529 VND in interest. That is the interest that would otherwise have accrued on the principal you cleared early.
- The penalty costs 12.235.903 VND. It is 2% of the 611.795.172 VND of principal you repaid ahead of schedule — not a rounding error.
- Net saving is 1.128.125.626 VND. After the fee, this is your real benefit. If your bank charged only 1%, the net saving would rise to 1.134.243.578 VND — so the specific fee schedule matters a lot.
Want to finish even sooner? Lifting the extra to 10.000.000 VND a month shortens the loan by 12 years 10 months and saves 1.456.868.055 VND in interest, for a net saving of 1.439.868.055 VND after the penalty. FiMo also has mortgage-payoff and amortization tools if you want the full month-by-month breakdown.
Frequently asked questions
Does prepaying a loan really save money?
Yes, but only the figure net of the penalty is real. Because interest accrues on the outstanding balance, clearing principal early cancels the interest of later years. Illustrative example: on a 1.500.000.000 VND loan at 10.5%/year, paying 5.000.000 VND extra a month saves 1.140.361.529 VND in interest and clears the loan 9 years 9 months early. After the 2% penalty (12.235.903 VND), the net saving is 1.128.125.626 VND.
How do early-repayment penalties work at Vietnamese banks?
Most Vietnamese banks charge the fee on the amount you repay ahead of schedule, typically 2% or more and highest in the early years, then tapering (for example 2% in year 1, 1% by year 3, waived after year 5). This tool models a flat penalty = rate × total principal prepaid; in the default scenario the 611.795.172 VND of extra payments incurs a 2% fee of 12.235.903 VND. The exact figure is in your loan's fee schedule — read it before you prepay.
How much time do extra payments shave off?
On the default 1.500.000.000 VND loan at 10.5%/year over 20 years, paying 5.000.000 VND extra a month clears it in 10 years 3 months instead of 20 years — 9 years 9 months early. Lift the extra to 10.000.000 VND a month and you shorten the loan by 12 years 10 months. The larger and earlier the extra payment, the bigger the effect, because cutting principal sooner cuts the interest that compounds on it.
Should I prepay the loan or invest the money instead?
Compare the loan rate against your expected investment return after tax and risk. Paying down a 10.5%/year loan is a guaranteed, risk-free 10.5%/year. For investing to win, the alternative has to reliably beat 10.5%/year — hard for most people, especially with VN loan rates this high. As long as the net saving after the penalty stays positive (1.128.125.626 VND in the example), prepaying is usually the safer, more efficient choice.
When does prepaying NOT make sense?
When the penalty swallows most of the interest saved, or when you have no emergency fund. The penalty is steepest in the first years, so the net saving can be thin early on; waiting until the high-fee window passes often pays better. And never drain your cash to prepay while leaving an empty 3–6 month emergency fund — losing liquidity is riskier than a few percent of interest. Enter your bank's actual penalty rate to check whether the net saving is still positive.
Does prepaying lower my monthly instalment?
Usually not — most banks keep the monthly instalment the same and shorten the term rather than reducing the payment. You keep paying 14.975.698 VND a month (plus your extra), but finish sooner. Some banks let you "recast" the loan to lower the monthly payment after a lump-sum prepayment, but you have to request it. If your goal is to ease monthly cash flow rather than finish early, ask your bank specifically about a recast option.