About this tool
Compare how flat rate and reducing balance interest affect your loan EMI and total payment. See exactly how much you save with reducing balance.
Why reducing balance is cheaper
Flat rate calculates interest on the full principal for the entire tenure. Reducing balance only charges interest on the outstanding amount, saving you money.
Frequently asked questions
Which is better: flat or reducing interest?
Reducing balance is almost always cheaper. Always ask your lender which method they use and compare with this calculator.