In Flat Interest Rate loans, interest is calculated on the initial principal amount througout the loan tenure. In this post I will provide you with excel based calculator to convert reducing balance rate to flat interest rate. Reducing balance to flat interest rate converter -Excel. In real time scenario reducing rate option is better over flat rate when you borrow money.
Would you prefer an auto loan with an interest rate calculated on reducing balance, or a flat rate ? The differences between the two are important to understand in order to make an accurate and relevant comparison.
Effective Interest Rate equivalent. Flat interest rates generally range from 1. Flat rate to reducing balance rate Excel calculator. I have previously written on Personal Loan interest rate. A flat rate is a type of interest rate which is calculated on the entire amount of loan throughout its tenure. LendingTree helps simplify financial decisions through choice, education, and support.
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