Convert reducing rate to flat rate calculator

In this post I will provide you with excel based calculator to convert reducing balance rate to flat interest rate. A t the time of publication of 4-in-Loan Calculator (to calculate EMI, interest rate, loan period or Loan Affordability), I promised to design an interest rate converter to help you convert flat rate of interest to monthly reducing balance rate and vice-versa. Reducing balance to flat interest rate converter-Excel. 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. Most efficient method for converting flat rate interest to APR. Easy way to convert reducing rate to flat, simply flat rate divided by 1. This calculator provides a method of comparing compound and flat rates of interest.

For example, an APR of 7. EMI calculator works on the basic principle of interest calculation. Effective Interest Rate equivalent. Before you take a home loan or a vehicle loan be sure to calculate your emi on emicalulator available on emicalculator.

Flat Rate of Interest basically means that interest is charged on full amount of the loan throughout the entire loan tenor. Flat Interest Rate is not same as ‘X p. EMI amount would be Rs 124. But if you want to know the exact formula for calculating flat rate loan then please check out the Formula box above.

Total amount to be repaid Rs. Flat interest for years would be Rs. Would you prefer an auto loan with an interest rate calculated on reducing balance, or a flat rate ? Using the calculator , you will be able to see which methods give you a better.

But this is an excel based calculator which will make complex calculations very easy. This means that some pick a flat rate and others a reducing rate , so you cannot just compare the advertised rates you see on. Calculate interest rates before opting to take out a loan in UAE. In real time scenario reducing rate option is better over flat rate when you borrow money. Now you can see that a loan at a flat rate of percent is more expensive than a loan at a reducing rate of percent – so make sure you check the fine print – flat rate or reducing balance – before choosing a product.

If you need to convert your reducing balance to a flat rate , one of the methods is to divide by 1. The difference of flat interest rate and effective interest rate - Duration:. With so many different short-term loan vehicles and other financial products available to consumers, deciphering the interest you are paying or the interest that is being paid to you can be very difficult.

Then enter the loan tenure (months). And the rate of interest ( reducing ). So, which one is better – the flat – or the reducing rate ? A good rule of thumb to understanding your loan offers is that if the current interest rate in the market is low, opting for a fixed rate might be beneficial. However, reducing rates are useful if the current interest rates in the market are high. Every year that you are borrowing from a bank, the bank charges you a flat rate of x on your principal until you pay the money back. Annual flat rates are quite simple.

Diminishing or reducing method an 2. There is a formula to calculat the interest for the whol period (e.g. months). Same way there is another formula to convert the interest interest rate frim diminsing rate to flat rate and. Partly fixed and Partly floating rate of interest: These loans are also referred to as fixed-cum-floating, fixed first, split rate and dual rate loans.

Some lenders give the option to split the loan amount and charge fixed interest rate on. Use a spreadsheet to create an amortization table to track a reducing balance loan. You can get and give advice on a range of topics including: product support using Mifos X, community engagement, financial inclusion immersion, partner onboarding, development brainstorming, and more.

The flat rate does not take account of the reducing loan balance as payments are made, and therefore does not provide a true reflection of the. Notice that I did not use a $, since anyone interested in a flat rate loan will be most likely be using a different currency. Changing the dropdown cell to 9. I also included a calculator to convert a Flat Rate to an APR or.

Flat Rate of loan (not APR) Monthly Repayments If what you are being told by your garage is different from the result this Car Loan Calculator shows, it probably means that what you are being told is not exactly the whole truth - you are having the wool pulled over your eyes about some aspect of the deal!