Personal Loan Calculator
The interest rate on a loan may be quoted as a flat rate (a fixed rate applied to the initial loan amount) or a reducing balance rate (a fixed rate applied to the loan outstanding).
Use this calculator to convert a flat rate of interest to a reducing balance equivalent rate.
Prior to making any change to your personal finances, please read the disclaimer
Notes on this calculator
- "Flat Interest Rate" is the rate that is applied on the initial loan amount over the term of the loan. While this makes the calculations very simple for the customers, it does not truly reflect the actual cost of the loan.
- "Reducing Balance Rate" is the rate that is applied on the reducing loan amount over the the loan term. While this makes calculations a bit complicated for customers, it correctly reflects the actual cost of the loan.
- While this reflects an approximate conversion between the two rates, please check with your Bank about the exact reducing balance rate beng applied to your loan.