Flat vs Reducing Interest Rate Comparator
A 12% flat loan is not a 12% loan. Compare installments and total interest on both methods and get the effective annual rate of any flat-rate offer.
QUICK ANSWERFlat interest is charged on the full principal for the entire tenure; reducing interest is charged only on the outstanding balance. Roughly, a flat rate equals 1.8–1.9 times the same number as a reducing rate: 12% flat for 12 months ≈ 21.5% reducing (APR). Always compare loans on the reducing rate or APR shown in the Key Fact Statement.
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What you get free in the Flat vs Reducing Interest Comparator
- ✅ Monthly, weekly, fortnightly, daily
- ✅ Flat ↔ reducing (APR)
- ✅ Total interest difference
- ✅ Processing fee included
- ✅ Side-by-side table
- ✅ Share on WhatsApp
How to use the Flat vs Reducing Interest Comparator
- STEP 1Enter the loanAmount, rate, tenure and frequency.
- STEP 2CompareInstallment and total interest on flat vs reducing.
- STEP 3Check APRSee the real annual rate of the flat offer.
- STEP 4DecideShare the comparison or print it.
Frequently asked questions
Is flat rate cheaper than reducing rate?
At the same quoted number, flat rate is always more expensive because interest does not fall as you repay. 10% flat over 3 years costs about the same as 17.9% reducing.
Why do microfinance loans quote flat rates?
Flat rates are simple to calculate in the field. RBI now requires lenders to show the APR in the Key Fact Statement so borrowers can compare.
Is this tool free? Do I need to sign up?
Yes, it is completely free with no login and no limit on entries. Signing up for FastFee is optional. The free plan keeps your records synced across devices; automatic WhatsApp reminders, UPI AutoPay and team logins are on FastFee Premium.
Where is my data stored?
Only in your browser on this device (local storage). Nothing is uploaded to FastFee. Clearing browser data deletes it, so export a CSV or PDF backup regularly.
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