Flat vs reducing rate calculator
Convert a flat interest rate into its equivalent reducing-balance rate, so you can compare loan offers fairly.
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₹10K₹5 Cr
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yrs
1 yr10 yrs
Year-by-year breakdown
Illustration only. Actual EMI, rate, eligibility and charges are decided by the lender and depend on its credit assessment. Loans are subject to the lender’s approval.
How it works
About the flat vs reducing rate calculator
A flat rate charges interest on the full loan amount for the whole tenure, even as you repay it. A reducing rate charges interest only on what you still owe. A flat rate therefore looks lower than it really is.
The formula
Flat EMI = (P + P × f × n) ÷ (12n); reducing rate = the rate whose standard EMI equals the flat EMI
f = flat rate, n = years.
Frequently asked questions
Where are flat rates common?
Some vehicle, consumer-durable and personal loans are quoted on a flat basis. Always ask for the reducing-balance rate or APR before comparing.
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