Interest charged only on the part of the loan you still owe.
Each EMI repays some principal, so next month's interest is worked out on a smaller balance. Banks quote home, car and personal loan rates this way.
It is the fair way to compare loans. A flat rate of 10% costs about the same as a reducing rate of 18% over a few years.
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 →
LoansWhat Is a Good CIBIL Score, and How to Raise ItYour CIBIL score runs from 300 to 900, and 750 or more opens most doors. Here is what moves it, what does not, and how to raise it step by step.Read the guide →Automatically organise your spending, track expenses and understand where your money goes.
