Understanding Flat Interest Rate for Loans in India
A Flat Interest Rate is a fixed rate charged on the entire original loan amount throughout the loan tenure, regardless of how much has been repaid. This means the interest amount remains constant over time, making EMIs predictable and easy to calculate. However, flat rates typically result in higher total interest paid compared to reducing balance rates, where interest is calculated on the outstanding loan balance. Flat interest rates are commonly used in personal loans, car loans, and consumer durable loans, often favored for their simplicity and fixed monthly payments. Borrowers should carefully compare the flat rate with effective interest rates and consider loan tenure and amount before choosing the best option. For detailed insights on flat interest rates and how they compare with other rate types, visit MortgageRio to make well-informed financial decisions.