Convert Flat Interest Rate to Reducing Balance Interest Rate

This tool finds the effective interest rate for a flat rate interest loan.


For a loan tenure of 3 years, flat interest rate of 12.00% is approximately equals to 21.20% of reducing balance interest rate.
For a loan amount of 1,00,000 with a flat rate of 12.00% or reducing balance interest rate of 21.20%, total interest payment during 3 years is ₹36,000.


Loan Parameters
Loan Amount      ₹   
Loan Term       years
Flat Interest Rate %

Loan Term = 3 Years

Flat Interest Rate - 12.00%

Effective Interest Rate = 21.20%

Total Interest = ₹ 36,000
Total Repayment = ₹ 136,000

EMI Calculator
Calculate EMI (Equated Monthly Installment) for a fixed rate loan spanned across years with annual and monthly amortization tables.
Loan Amount  ₹ 
Loan Term     years
Interest Rate %



Flat Rate EMI Calculator
Calculate EMI for a flat rate loan with annual and monthly amortization tables
Loan Amt
Loan Term    years
Flat Rate   %


Compare EMI Calculations
Compare EMI calculations for 2 interest rates. See how EMI and total interest amount change for different interest rates and the same loan amount and tenure. Useful when bank interest rates are changes for existing loans.
Loan Amount  ₹ 
Loan Term     years
Interest Rate 1 %
Interest Rate 2 %



Flat -vs- Reducing Balance Interest Rate
Check the EMI Calculations for Flat vs Reducing Balance Interest Rate

In Flat Interest Rate loans, interest is calculated on the initial principal amount througout the loan tenure.

In Reducing Balance Interest Rate loans, interest is calculated on the remaining principal amount at any time.

Flat interest rate is normally used by vehicle finance companies.
Loan Amount      ₹   
Loan Term       years
Flat Rate                   %
Reducing Balance Rate %