Calculators / Loans & EMI
Flat vs Reducing Rate Calculator
Lenders quote flat rates because they look small. Convert it to the reducing-rate truth.
A flat rate sounds cheaper than a reducing rate but usually costs far more. See the true comparison.
Questions, answered
Why is a flat rate so much higher than it looks?
A flat rate charges interest on the full original amount for the entire tenure, even as you repay. A reducing rate charges only on the outstanding balance. A flat rate is usually about 1.8 to 1.9 times the equivalent reducing rate.
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