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Flat vs Reducing Interest Calculator
Compare a flat-rate loan with a reducing-balance loan at the same advertised rate.
Last updated 2026-09-18
Reducing EMI
₹16,607
Flat EMI
₹18,889
Reducing interest
₹97,858
Flat interest
₹1,80,000
Extra interest on the flat method: ₹82,142
How it works
Flat interest = P × rate × years. Reducing EMI uses the standard EMI formula. Flat EMI = (P + flat interest) / months.
How to use this calculator
- Enter the inputs shown above (amount, rate, tenure, income, or other fields).
- Read the live results — they update as you type.
- Check the formula, worked example, and assumptions on this page before you decide.
Formula
Flat interest = P × rate × years. Reducing EMI uses the standard EMI formula. Flat EMI = (P + flat interest) / months.
Worked example
₹5 lakh at 12% for 3 years: reducing EMI is about ₹16,607; a flat 12% EMI is about ₹18,056 — you pay more interest on the flat method.
Reading the result
Treat the output as a planning figure. Compare it with your sanction letter, payslip, or GST invoice rather than treating it as a filing or a loan offer.
See also: calculation methodology and disclaimer.
Frequently asked questions
The advertised % is applied on the original principal for the full tenure, not on the falling balance. The effective rate is higher.
Assumptions and limits
- This is a planning estimate. Your lender, employer, or tax officer may use different inputs or rounding.
Results are educational estimates, not tax, legal, investment, or medical advice, and not a loan offer. Verify filings and payments with the official authority or a qualified professional.