What is a Reducing Rate Interest Calculator?

A reducing rate interest calculator allows borrowers to see how their loan payments will change over time. Unlike flat rate interest, which calculates interest on the entire principal throughout the loan term, the reducing rate method calculates interest on the outstanding balance. This means that as you make payments, the interest you owe decreases, ultimately leading to lower overall costs

Flat rate interest means that the interest is calculated on the full principal amount of the loan for the entire loan tenure.

Reducing rate interest Calculator calculates interest on the outstanding balance of the loan. As the borrower pays down the principal, the interest amount decreases.