What is the Flat vs Reducing Rate Calculator?
Compare a flat-rate loan with a reducing-balance loan and see the true cost of a flat rate.
Enter loan amount, quoted rate per year and term and the Flat vs Reducing Rate Calculator returns flat-rate monthly payment, reducing-balance monthly payment, interest at flat rate, interest at reducing rate and extra interest with flat rate. Results update as you type, and nothing you enter leaves your device.
How it is calculated
How to use it
- Enter loan amount.
- Enter quoted rate per year in %.
- Enter term in years.
- Read flat-rate monthly payment in the results panel. It updates as you type.
- Change any value to compare scenarios, or use Share to send the result as a link.
Worked example
Common questions
What formula does the Flat vs Reducing Rate Calculator use?
It uses: Flat interest = P × R × T ÷ 100 on the full principal; Reducing balance charges interest only on what you still owe.
What do I need to use the Flat vs Reducing Rate Calculator?
You need loan amount, quoted rate per year and term. Sensible starting values are filled in so you can see how it works straight away.
Is the Flat vs Reducing Rate Calculator free, and is my data stored?
It is free with no sign-up. The calculation runs in your browser, so the values you enter are not sent to or stored on our server.