CALCULATORS
Flat vs reducing interest calculator
Indian NBFCs often quote SMEs a flat monthly or annual rate that looks smaller than a reducing-balance rate. This calculator solves for the reducing rate that produces the same EMI, then builds an all-in APR from your real cash flows (net disbursal out, EMIs in), including processing fees, insurance, GST and advance EMIs. Outputs are indicative estimates for discussion with your CA - not an offer.
Rates verified as of 1 Sep 2026
Your numbers
Fees, insurance and advance EMIs
Your result
What this loan really costs
30.6%a year, reducing
The quote reads as 18.0% a year flat. With fees and advance EMIs the all-in APR is 32.5%.
- Loan principal₹25L64%
- Interest₹13.5L35%
- Fees and charges₹59K2%
Interest PrincipalEMI 1 is 60% interest; the last is 2%
- Monthly EMI
- ₹1.07L
- Total interest
- ₹13.5L
- Money in your account
- ₹24.4L
- of ₹25L sanctioned
- Upfront deductions
- ₹59K
- Fees, GST, advance EMIs
Full breakdown
- Equivalent reducing rate
- 30.59% p.a.
- All-in APR (fees + advance EMIs)
- 32.46%
- Flat annual (from quote)
- 18.00%
- Rule of thumb (×1.8, note only)
- 32.40%
- EMI (quoted method)
- ₹1,06,944 / ₹1 lakh 6 thousand
- EMI (reducing at equivalent)
- ₹1,06,944 / ₹1 lakh 6 thousand
- Total interest (quoted path)
- ₹13,50,000 / ₹13 lakh 50 thousand
- Total outgo (quoted path)
- ₹38,50,000 / ₹38 lakh 50 thousand
- Extra vs reading the flat annual as reducing
- ₹5,96,284 / ₹5 lakh 96 thousand
- Net credited vs sanctioned
- ₹24,41,000 / ₹24 lakh 41 thousand credited · ₹25,00,000 / ₹25 lakh sanctioned
- Upfront drag (fees + GST + advance EMIs)
- ₹59,000 / ₹59 thousand
NBFCs often quote flat because the percentage looks smaller on a one-pager. That is a quoting convention, not proof of a cheap loan. Always compare EMI, net credit and APR.
ASSUMPTIONS
What we assume.
Open assumptions
- All math runs in your browser. Nothing here is a sanction or offer.
- Statutory rates and windows come from a single config file last verified on 1 Sep 2026.
- Bank and NBFC grids vary by geography, segment and internal policy.
- Kredway is a lending service provider / DSA intermediary and does not lend. Calculator outputs are indicative estimates, not offers. Actual eligibility, rate and terms are determined by RBI-registered banks and NBFCs at their sole discretion.
FAQ
Common questions.
What is APR here?
APR is the all-in annualised cost from your actual cash flows: money you receive after fees and advance EMIs, versus EMIs you pay. It is not the same as the flat rate printed on a quote sheet.
Why does my sanction letter show a different number?
Lenders may disclose a reducing rate, a flat rate, or an annual percentage in the Key Fact Statement. Compare the EMI and total outgo, not only the headline percentage.
Is quoting a flat rate illegal?
No. Flat rates are common in MSME and vehicle finance. What matters is clear disclosure so you can compare offers. Ask for the reducing-balance equivalent and the full fee schedule.
What should I ask my lender?
Ask for: reducing annual rate, EMI, processing fee (₹ and %), insurance, GST on fees, advance EMIs, and net amount credited to your account on disbursal day.
REFERENCES
Primary sources.
GUIDES
Read more on this.
RELATED
Other calculators.
Kredway is a lending service provider / DSA intermediary and does not lend. Calculator outputs are indicative estimates, not offers. Actual eligibility, rate and terms are determined by RBI-registered banks and NBFCs at their sole discretion.