Flat vs Reducing Interest Calculator
Compare loan repayments under flat and reducing balance interest methods.
Flat vs. Reducing Interest Calculator
Compare flat interest and reducing balance interest for loans.
About Flat vs Reducing Interest Rate Calculator
This calculator compares flat rate and reducing balance interest methods for loans. Understanding the difference helps you make better borrowing decisions and compare loan offers accurately.
Key Difference
In flat rate, interest is calculated on the original principal for the entire tenure. In reducing balance, interest is calculated on the outstanding principal, which decreases with each EMI payment — resulting in lower total interest.
Frequently Asked Questions
Note: Always compare the effective annual rate (EAR) when evaluating loan offers from different lenders.