Flat rate
Interest charged on original principal for the full term.
- EMI
- ₹18,055.56
- Total interest
- ₹1,50,000.00
- Total payment
- ₹6,50,000.00
Loan comparison
Flat vs Reducing Rate Calculator
Convert a flat interest quote into a reducing-balance comparison so the real payment impact is easier to judge.
Flat EMI
Interest is based on original principal.
Same-rate reducing
Shows cost if the same rate reduced monthly.
Equivalent rate
Finds the reducing rate with similar EMI.
Flat EMI
₹18,055.56
Equivalent reducing rate
17.9177%
Extra flat-rate interest
₹69,190.58
Reducing at same rate
Same annual rate, but interest reduces with balance.
- EMI
- ₹16,133.59
- Total interest
- ₹80,809.42
- Total payment
- ₹5,80,809.42
Equivalent reducing
Reducing rate that approximates the flat EMI.
- EMI
- ₹18,055.56
- Total interest
- ₹1,50,000.00
- Total payment
- ₹6,50,000.00
Interpretation
A flat rate of 10% behaves like an approximately 17.9177% reducing balance rate for this amount and tenure.
This estimate is for education only. It is not financial advice, a loan offer, or a lender statement.
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Methodology
Flat total interest equals principal multiplied by the annual flat rate and tenure in years. Reducing-balance EMI uses monthly compounding over the same tenure. The equivalent reducing rate is solved by finding the reducing annual rate that matches the flat EMI after half-up paise rounding.
This comparison is educational and does not include fees, taxes, processing charges, payment timing, or lender-specific policies.
FAQs
Why can a flat rate look lower?
A flat-rate loan calculates interest on the original principal for the full term, even as repayments reduce the balance. A reducing-balance loan charges interest on the outstanding balance.
What is equivalent reducing rate?
It is the reducing-balance annual rate that produces roughly the same EMI as the entered flat-rate loan for the same amount and tenure.
Is this an APR calculation?
No. This is a payment comparison. Fees, insurance, taxes, processing charges, and exact disbursement dates are not included.
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