EMI Calculator — Flat vs Reducing
📊 EMI Calculator — Flat vs Reducing
Flat Monthly EMI
₹4,875.00
Flat — Total Interest
₹17,000.00
Flat — Total Amount
₹1,17,000.00
Reducing Monthly EMI
₹4,545.57
Reducing — Total Interest
₹9,093.62
Reducing — Total Amount
₹1,09,093.62
✅ Reducing saves ₹7,906.38 in interest vs Flat
📈 Flat vs Reducing — Comparison Chart
Understanding Flat vs Reducing Interest Rate
Interest is a part of the loan amount that is paid to the lender in addition to the principal amount. Loan interest rates are calculated in a similar manner by various banks...
Flat Interest Rate
A Flat Interest Rate means a lending rate that stays unchanged through the loan tenure...
Reducing Interest Rate
In this scenario, the personal loan interest rate is determined based on the amount of principal owed at the end of a certain period...
Differences Between Flat Vs Reducing Interest Rate
- Flat is on total loan sanctioned, Reducing is on outstanding balance.
- Flat often results in higher effective rate than reducing.
- Reducing reflects true cost of borrowing, Flat is simpler.
❓ Frequently Asked Questions
What is the difference between Flat and Reducing EMI? +
Flat EMI is calculated on the original loan amount throughout the tenure, while Reducing EMI recalculates interest on the outstanding balance after each payment.
Which method is cheaper? +
Reducing rate is usually cheaper, as interest reduces as the principal is repaid, unlike Flat where interest is charged on the entire amount.
Do banks in India use Flat or Reducing? +
Most banks and NBFCs use the Reducing balance method, as it reflects the true cost of borrowing. Flat is less common and usually used in simple loans.
