Flat rate vs reducing balance calculator
Compare flat interest with a reducing-balance loan.
Your estimate
Flat-rate monthly paymentBDT 18,888.89
- Flat-rate total interest
- BDT 180,000.00
- Equivalent reducing annual rate
- 21.2%
- Reducing EMI at the quoted rate
- BDT 16,607.15
- Reducing total interest
- BDT 97,857.58
Results update as you change the numbers.
Sample inputs. Enter your own rates and fees. See assumptions below.
Formula, example & assumptions
Behind the answer
How it works
Flat interest = principal × annual rate × years. Equivalent reducing rate is solved from the same monthly payment.
Flat interest = principal × annual rate × years. Equivalent reducing rate is solved from the same monthly payment.
A worked example
A 12,000 one-year loan at 10% flat costs 1,200 interest and 1,100 per month.