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factors that affect interest rate

Hey there! Welcome to our guide to understanding the world of interest rates on speedy loans in Cambodia. In this article, we’re going to take a deep dive into this topic, making it super easy for you to grasp. We’ll start by exploring the lending scene in Cambodia, look at the different types of loans you can get, and most importantly, we’ll decode how interest rates on easy speedy loans work and what they mean for you.

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Introduction on Low-Interest Speedy Loan

An interest rate is the percentage at which money is either borrowed or lent over a specific period. It represents the cost of borrowing funds or the return earned on invested capital. When you borrow money, you typically pay interest to the lender as compensation for using the funds. Conversely, when you invest money, you receive interest as a reward for allowing someone else to use your funds.

Interest rates on speedy loans are a fundamental concept in finance and economics, impacting various aspects of our financial lives. The level of interest rates can be influenced by economic conditions, inflation expectations, central bank policies, and market forces, making them a critical component of financial decision-making and economic stability.

factors that affect interest rate

Why Interest Rates on Speedy Loans Matter

Interest rates have been a controversial topic since the loan service was invented, especially interest rates on speedy loans. It determines how much you pay and how long it takes to pay it off.

Many people in Cambodia need easy, speedy loans for a thousand reasons, like dealing with starting a business or unexpected expenses. This phenomenon in Cambodia is common, while fatal road crashes rose by 14 percent in 2022, with 5,735 people killed and injured on Cambodia’s roads. However, financing a loan is not as easy as lending $1,000 and returning $1,000. There are many variables affecting your loan amount; one of the most important elements is interest rates on fast loans.

bank loan

Omit In Interest Rates

Let’s make the interest rate on speed loans into a little story. An entrepreneur, Sreyneang, has a strong sense of fashion, and she decides to finance a quick business loan to expand her clothing store in Phnom Penh, but she doesn’t pay much attention to the interest rate. Business is booming, but she realizes that most of her profits are repaying the loan because the loan agreement is offering 20% interest rates on speedy loan.

Many Cambodians, eager to grab opportunities, get caught off guard by the complexities of interest rates. That’s where we specifically discuss the topic of interest rates to ensure you can make smart borrowing decisions by approaching reliable money lenders in Cambodia.

Interest Rates Fluctuation 

To get a low-interest speedy loan in Cambodia, you have to understand who offers the level of your interest rate. Logically, your loan provider is the party that decides how much interest you need to bear on your entire repayment. However, the National Bank of Cambodia (NBC) 2022 annual report said that the formal “banking system” at the time comprised 59 commercial banks, nine specialized banks, five deposit-taking and 82 non-deposit-taking microfinance institutions (MFI); 224 rural credit institutions; and 16 financial leasing companies. Each of these players has its own rules and interest rates, and all of these things should be considered when financing a speedy loan.

The Factors Affecting Interest Rates

Interest rates aren’t just random numbers. Cambodian money lenders can’t simply decide it based on various factors. We must understand the root of the factors affecting where the interest rate goes so we can predict when the best time is to finance an instant loan. As a borrower, these are the things you need to know:

Market Forces

Cambodia has a free market, which includes a variety of private freedoms. It significantly affects the interest rates on fast loans based on market supply and demand. For example, the iconic Phnom Penh Hotel’s standard rooms cost $60 per night. However, the room price goes up $80 during the holidays because there’s extra tourism traveling to Cambodia.

Phnom Penh Hotel is unable to cater to extra tourists, so they will increase the price. It is logical and always happens in the market, and effective interest rates on speedy loans You can resolve your concern with market forces with the Khmer Prosperity Loan, our 6.99% low interest fast loan solely based on the borrower’s profile.


Regulation is like the referee in this game. In Cambodia, institutions like the National Bank of Cambodia (NBC) set the rules for interest rates in the financial sector. They aim to keep borrowers safe and create a stable lending environment. NBC adjusts the interest rate by keeping its eye on the financial environment in Cambodia, like the inflation rate, people’s livelihoods, and other macro circumstances. You can always check the latest national interest rate on their official website, and it’s genuine and reliable. All licensed lenders, like Khmer Prosperity Loan, have to follow NBC’s latest adjustment, as it’s a direction to make Cambodia stable and spring up.

Your Creditworthiness

The first two factors are set by the third party and uncontrollable by loan providers in Cambodia. Creditworthiness is not a variable but a chance for you to dispute a low-interest-rate speedy loan. It represents your financial reputation scorecard based on your credit history, income, and financial situation.

You can build strong creditworthiness before lending a loan as a bargaining chip. If you’ve got a solid scorecard, you’re likely to get lower interest rates because lenders see you as a safe bet.

Decoding the APR (Annual Percentage Rate)

To completely understand the interest rates on fast loan in Cambodia, let’s break it down into particular parts. The interest rate is known as the annual percentage rate (APR) because it is typically calculated in years. It wraps up interest, fees, and charges into one neat package. It’s like the total cost of borrowing in one number. Take a simple interest rate; for example, if the loan amount that you apply for is $2,000 and the interest rate is 8% for 6 months, then your interest will be $80.

Thus, make sure to always keep an eye on the APR when you’re comparing loan offers. This is the critical element in determining whether it is a good offer or not.

Types of Interest Rate On Easy Speedy Loans

Nominal Interest Rate

The nominal interest rate on instant loans represents the basic rate of interest without considering any additional factors, taking into account how frequently interest is compounded or any fees or charges associated with the financial product. It’s a straightforward percentage that tells you how much interest you would earn or pay on an investment or loan without any additional calculations.

For example, when you take out a speedy loan with a 9% nominal interest rate, it represents the interest percentage you’ll pay on the principal amount borrowed annually. Khmer Prosperity Loan uses a nominal interest rate to calculate your loan, and the benefit of it is that calculating all types of loans is easy.

Effective Interest Rate

The Effective Annual Rate (EAR), also known as the Annual Equivalent Rate (AER) in some Cambodian countries, is a financial metric that represents the true annual interest rate on a speedy loan. The EAR takes into account not only the nominal interest rate but also how frequently interest is compounded or added to the principal balance during a year. When interest is compounded more frequently, you can earn or pay more interest for a year. So, pay attention to the compounding details when your speedy loan is calculated at an effective interest rate.

Fixed and Variable Interest Rates

There are other fixed and variable interest rates on speedy loans. The fixed rates indicate that your interest rates on instant loans that money lenders offer you are static. In contrast, variable interest indicates the interest rate you make at the initial level may not prolong until the end.

For example, financial institutions offer you 5% APR variable interest. Somehow, the National Bank of Cambodia found out that the inflation rate had become severe and there was a need to increase the 3% interest rate to ensure the market was not overheated. You will get a notification from the financial institution about your latest interest rates on speedy loans adjusted to 8%.

Khmer Prosperity Loan does not want borrowers to have such unexpected burdens; thus, we offer a fixed-level, low-interest speedy loan for you. You can start your business with our trusted financing support.

Interest Rate Calculation Methods

Since we explained so many types of interest rates, they’re calculated using different methods. To master interest rates on easy speedy loans, Khmer Prosperity Loan suggests you understand how to calculate these interest rates on fast loans.

Calculation of Flat Interest Rate

To calculate the total interest you pay for the entire loan we can use the formula of 

I = Principal x Interest Rate x Loan Term 

nominal interest formula

Using an example, you get a $10,000, 7% low-interest quick loan for a year. So the total interest will be $700. You can calculate it by using our loan calculator, all the outcomes will come in a second based on the amount you enter.

Calculation of Compounding Interest Rate 

Adding a tiny change in compounding from nominal interest rates on easy fast loans has a significant variance in the outcome. It applies to the situation where you are borrowing a speedy loan or putting your savings as a fixed deposit. These two situations have completely different formulas to get the result.

Effective Interest Rate Calculation

Let’s see how the magic of compounding affects your return on investment from the example below to have a clearer picture of the effective interest rate. The compound interest formula is A = P (1+r/n)nt .

The values are:

A = Future value of the investment

P = Principal amount invested

r = The rate of interest

n = Number of times interest gets compounded per period

t = Number of periods the money is invested for

effective interest formula

Here is an example: You deposit $10,000 into a bank as a fixed deposit for a year with an 7% effective interest rate, and it compound monthly.

A = $10,000 (1+ 0.07 / 12)

You get $10,722.90 after a year with a $10,000 initial principal and $722.90 interest, respectively. We can find out that there’s an extra $22.90 in interest compared to a fixed interest rate calculation.

Reducing Interest Rate Calculation

We cannot calculate interest with reducing interest rate methods because the interest varies in the compounding period. So we need to do an amortization table to determine if you get a low-interest speedy loan. By doing the table, we must understand how to calculate the equated monthly installment (EMI).

The EMI formula:

EMI = P * [( r * (1 + r)^n)) / ((1 + r)^n – 1)]

The values are:

P = Principal amount

r = Periodic monthly interest rate

n = Total number of payments

equated monthly installment

Imagine getting a 7% low-interest instant loan from Khmer Prosperity Loan with $10,000 for a year, compounded monthly.

EMI = $1,000 * [(0.0058 * (1 + 0.0058) ^ 12)) / ((1 + 0.0058) ^ 12 – 1)]

With the formula, we will find out that your monthly repayment is $86.53. After getting the repayment amount, you can create the amortization table consisting of interest paid, principal deduction, loan balance, and payment amount.

amortization table

Impact On Total Repayment

Let’s summarize the outcome from the calculation above. By using the same setting of loan amount, loan term, and interest rate. The flat interest rate offers a total of $700 interest for the entire loan, while the amortization table shows there’s only $383.21 for the effective interest rate.

The difference between these two calculations is $316.79, and this amount will be larger when the borrowing amount is greater or the compounding frequency is higher. We can prove that the reducing balance method can be more budget-friendly because you pay less interest over time. So, when comparing loan offers, it’s not just about the interest rate but also what type of interest rate it is.

Overview of Interest Rate Ranges

Comparison Between Loan Types

Interest rates are not set in stone, and they can vary from lender to lender and over time. We do a comparison between several iconic banks in Cambodia, such as ABA Bank, ACLEDA Bank, and other financial institutions. ACLEDA is offering low interest loans ranging from 5.5% to 7.5%, but it’s only limited to collateral loans like house loans and car loans.

For non-collateral loans, they offer speedy loans, including salary loans, tuition fee loans, and business loans, which range from 10% to 18%. However, we are providing 6.99% interest rates on fast loans. You can contact us anytime to get this low-interest fast loan approval.

interest rates on speedy loans

Other than comparison, we can check the historical interest rates on easy loans in Cambodia. As we mentioned, interest rates are adjusted based on various factors. We can choose the period of low interest rates on instant loans in Cambodia to finance. After the impact of COVID-19, the Cambodian government is in the urge to stimulate Cambodia’s economy by lowering the interest rates on fast loans to encourage business owners to finance expanding their businesses.


We have gone through a comprehensive guide to understanding interest rates on speedy loans in Cambodia. We’ve covered everything from the lending landscape and loan types to the impact of interest rates and some tips to determine getting a low-interest speedy loan. Whether you’re considering a microloan, payday loan, or online installment loan, remember that making informed decisions is the key to financial success. Always shop around for the best loan offer from a long established financial institution, understand the terms and conditions, and be aware of the total cost of borrowing, including interest rates and any additional fees.

And in times of difficulty, don’t hesitate to seek help and communicate with Khmer Prosperity Loan; we’re ready to serve you anytime. Your financial well-being is worth the effort, and with the right knowledge and strategies, you can achieve your financial goals and enjoy a secure future.

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Frequently Asked Questions (FAQs)

Q1. What is the interest rate on a speedy loan?

The interest rate on a fast loan can vary widely, ranging from around 5% to 36% or higher, depending on factors like the lender, your credit score, and the loan amount.

Q2. What do I need to know about interest rates?

Interest rates determine the cost of borrowing money. It varies from multiple factors like creditworthiness, loan type, and market conditions.

Q3. How do interest rates work on loans?

Interest rates on loans represent the cost of borrowing money. Lenders charge borrowers a percentage of the loan amount as interest.

Q4. How do I find the best interest rate on a loan?

You can find it at Khmer Prosperity Loan. We’re offering a 6.99% low-interest fast loan, which applies to all business owners in Cambodia. To get such a low-interest, speedy loan, contact us now via Telegram for fast approval.

Vannak Sen

Vannak Sen is Khmer Prosperity Loan's dedicated financial advisor. His expertise lies in guiding entrepreneurs through the loan process with ease. Vannak’s articles offer simple, actionable advice, helping your business navigate the financial landscape and thrive. For personalized, clear, and practical strategies that resonate with the Cambodian business community, rely on Vannak’s insights.

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