Finance · Reducing balance
Loan Calculator — Monthly Payment & Amortization
Calculate monthly payments, total interest, and total cost for any amortized loan using the standard PMT formula.
How is this calculated?
PMT = P × r / (1 − (1 + r)⁻ⁿ) where P = principal, r = monthly rate (annual / 12 / 100), n = total months. Total interest = (PMT × n) − P.
Notes
- Enter the annual rate as a percentage, e.g. 5 for 5%. This calculator uses the reducing-balance (declining-balance) method used by most Saudi banks.
- These calculators are for informational purposes only and are not financial, tax, legal, or professional advice. Verify the result with an official source or qualified advisor.
This Saudi loan calculator uses the reducing-balance (declining-balance) formula that all major Saudi banks — Al Rajhi, SNB (National Bank), Riyad Bank, Alinma, Bank AlBilad, and Samba — apply to personal loans, mortgages, and overdrafts. It gives you the exact monthly payment (PMT), total interest, and total cost of any amortized loan.
How to use this calculator
- 1 Enter the loan amount (principal) in SAR, e.g. 100,000.
- 2 Enter the annual interest rate as a percentage, e.g. 5 means 5% per year.
- 3 Choose the tenure in years (e.g. 5 years = 60 monthly payments).
- 4 See your monthly payment, total interest, total cost, and the first 12 months of the amortization schedule — updated live as you type.
Frequently asked questions
How is a loan monthly payment calculated?
The monthly payment is computed with the standard amortization formula: PMT = P × r × (1+r)^n ÷ ((1+r)^n − 1), where P is the principal, r is the monthly interest rate (annual ÷ 12 ÷ 100), and n is the total number of monthly payments. This is the same formula used by Saudi banks for personal, mortgage, and car loans.
How do I calculate the loan I want from a Saudi bank?
Step 1: decide the principal (how much you need to borrow). Step 2: get the rate the bank offered you (Saudi personal loans are usually 3%–9% APR; mortgages are typically 3%–5%). Step 3: pick the tenure in months. Plug all three into this calculator — you instantly get the monthly payment, total interest, and total cost.
Do Saudi banks use reducing balance or flat rate?
All major Saudi banks (Al Rajhi, SNB, Riyad Bank, Alinma, Bank AlBilad, Samba) use the reducing-balance (declining-balance) method. Interest is applied each month to the remaining principal only — so you pay less total interest than with flat-rate loans. This calculator uses the same method.
What is the difference between a personal loan and a mortgage here?
Mechanically, none — both are reducing-balance installment loans. Practically, Saudi personal loans usually run 1–5 years at 5%–9% APR, while mortgages run 15–25 years at 3%–5%. The PMT formula is identical for both, so the same calculator works for either.
What salary do I need for a loan in Saudi Arabia?
Saudi banks typically require your monthly installment to stay under 33%–45% of net salary (varies by bank). For example, a 1,500 SAR monthly payment usually needs a net salary of 3,500–4,500 SAR. Use the Saudi Salary Calculator to check your net pay.