Flat vs Reducing Rate Calculator
See what a 'flat rate' loan really costs.
True (reducing) rate
17.92% p.a.
Flat rates charge interest on the full original principal for the whole tenure — so a 10% flat rate costs roughly the same as an 17–18% reducing rate. Always compare loans on the reducing rate.
Why flat rates look cheap but aren't
A reducing-balance loan charges interest only on what you still owe; a flat-rate loan keeps charging on the full original amount even as you repay. That's why a '10% flat' two-wheeler loan really costs about as much as an 18% bank loan. This converter reveals the honest number.
Frequently asked questions
Where are flat rates commonly used?
Two-wheeler dealerships, consumer durable financing, some gold loans and informal lending. Banks quote home and personal loans on reducing balance — regulated and comparable.
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