LOANS

Flat vs Reducing Interest Rate

Compare deceptive flat interest rates with actual effective reducing balance rates.

Loan Amount (Principal)

₹

₹50,000₹2,00,00,000

Twenty Five Lakh Rupees

Interest Rate (% p.a.)

5%24%

Loan Tenure (Duration)

Years

1 Years30 Years

Monthly EMI

₹25,357

for 180 monthly installments

Total Payable

₹45.64 L

Principal Amount

₹25,00,000

54.8% of total loan

Total Interest

₹20,64,260

45.2% of total loan

Principal vs Interest

Total Repayment₹45.64 L

Principal Loan Amount(54.8%)

Total Interest Payable(45.2%)

Year-on-Year Reduction

Hover on graph for yearly values

Principal Repaid

Outstanding Balance

Year	Opening Balance	Principal Paid	Interest Paid	Total Payment	Closing Balance
Year 1	₹25,00,000	₹82,638	₹2,21,646	₹3,04,284	₹24,17,362
Year 2	₹24,17,362	₹90,390	₹2,13,894	₹3,04,284	₹23,26,973
Year 3	₹23,26,973	₹98,869	₹2,05,415	₹3,04,284	₹22,28,104
Year 4	₹22,28,104	₹1,08,143	₹1,96,141	₹3,04,284	₹21,19,961
Year 5	₹21,19,961	₹1,18,288	₹1,85,996	₹3,04,284	₹20,01,673
Year 6	₹20,01,673	₹1,29,384	₹1,74,900	₹3,04,284	₹18,72,289
Year 7	₹18,72,289	₹1,41,521	₹1,62,763	₹3,04,284	₹17,30,767
Year 8	₹17,30,767	₹1,54,797	₹1,49,487	₹3,04,284	₹15,75,970
Year 9	₹15,75,970	₹1,69,318	₹1,34,966	₹3,04,284	₹14,06,652
Year 10	₹14,06,652	₹1,85,201	₹1,19,083	₹3,04,284	₹12,21,451
Year 11	₹12,21,451	₹2,02,574	₹1,01,710	₹3,04,284	₹10,18,877
Year 12	₹10,18,877	₹2,21,577	₹82,707	₹3,04,284	₹7,97,300
Year 13	₹7,97,300	₹2,42,363	₹61,921	₹3,04,284	₹5,54,937
Year 14	₹5,54,937	₹2,65,098	₹39,186	₹3,04,284	₹2,89,839
Year 15	₹2,89,839	₹2,89,839	₹14,318	₹3,04,157	₹0

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