Flat vs Reducing Interest Rate Calculator
The same headline rate costs very differently depending on how it's calculated. See the real difference in rupees.
₹
10K50L / 5M
%
1%24%
yrs
1 yr20 yrs
A flat rate is charged on the full original amount for the whole tenure. A reducing rate is charged only on the outstanding balance — so it shrinks every month as you repay. Same stated rate, very different real cost.
Flat rate EMI
₹9,583
total interest: ₹75,000
Reducing rate EMI
₹10,624
total interest: ₹137,440
Effective rate of the "flat" loan
~18.3%
A flat rate quoted at 10% actually costs about this much on a reducing basis.