What are flat and reducing interest rates?
Hellow frinds lets understnad What are flat and reducing interest rates? Interest is added to the principal to pay the lender. Different banks figure out loan interest rates in a similar way. The interest rate is usually shown as a yearly percentage of the loan. This is called the Annual Percentage Rate. Part of each EMI payment goes toward the loan's principal, and another part goes toward the loan's interest. Most loan interest rate agreements have EMIs that start out higher and get lower as the loan goes on. On the other hand, the EMI based on the principal amount is lower at the beginning of the term and goes up as the term goes on. There are different ways to figure out interest rates, and depending on which method you use, you might get the best rate for a personal loan. Flat interest Rate A flat interest rate is a loan rate that stays the same over the life of the loan. At the start of the loan period, the interest is calculated on the whole loan amount. The financial