How to use the Flat vs Reducing Interest Rate Calculator
Fill in the fields on the left. Results, charts and the breakdown update instantly as you type or move a slider. Pick your country at the top of the page to switch currency.
Formula
Flat EMI = (P + P × flat rate × years) ÷ months
Reducing rate = the rate that gives the same EMI on a reducing balance
Frequently asked questions
Why is the reducing rate so much higher?
With a flat rate you pay interest on money you have already repaid. The real rate is usually 1.7–1.9 times the flat rate.
Results are estimates for information only and are not financial, tax or legal advice. Tax rules, interest rates and fees change, so confirm important numbers with your bank, employer or a qualified adviser. Read our disclaimer.