Interest charged on the full loan amount for the whole tenure, even as you repay it.
With a flat rate the interest never falls as you repay, so the real cost is far higher than the number suggests. It appears in some consumer and vehicle loans.
To compare, ask for the reducing balance rate or the APR in the Key Fact Statement.
₹1,00,000 at 10% flat for 3 years is ₹30,000 interest, the same as about 18% on a reducing balance.
Short reads that explain how it works before you decide.
Personal LoansPersonal Loan True Cost: Flat vs Reducing Rate, Fees and APRTwo personal loans can quote rates that look close and cost very different amounts. Here is how flat and reducing rates differ, what the processing fee adds, and how to read the APR on the Key Fact Statement.Read the guide →
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