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Monthly EMI–
Total Principal–
Total Interest Payable–
Total Amount Payable–
Effective Duration–
Understanding the Flat Rate EMI Calculator
The EMI Flat Rate Calculator is a financial tool designed to determine the monthly installment payments for a loan where the interest is calculated on the entire principal amount for the full duration of the tenure. Unlike reducing balance loans, where interest decreases as you pay off the principal, a flat rate loan charges interest on the original sum regardless of how much you have already repaid.
How the Calculation Works
In a flat rate scheme, the total interest is calculated at the beginning of the term based on the initial principal. This total interest is added to the principal to form the total repayable amount, which is then divided by the number of months in the tenure to determine the Equated Monthly Installment (EMI).
Formula:
Total Interest = Principal × Flat Rate (%) × Tenure (Years)
Total Payable = Principal + Total Interest
EMI = Total Payable / (Tenure in Years × 12)
Example Calculation
Consider a scenario where you borrow 10,000 at a flat rate of 10% for 3 years.
Principal: 10,000
Interest: 10,000 × 10% × 3 = 3,000
Total Payable: 10,000 + 3,000 = 13,000
Monthly EMI: 13,000 / 36 months = 361.11
Flat Rate vs. Reducing Balance
It is crucial to understand that a flat interest rate is significantly more expensive than a reducing balance rate of the same percentage. Because you are paying interest on money you have already paid back in previous months, the effective interest rate of a flat rate loan is roughly 1.7 to 1.9 times higher than the quoted nominal flat rate.
When is this used?
Flat rate calculations are commonly used in personal loans, car loans, and micro-financing lending models. Lenders often quote flat rates because they appear lower (e.g., 5% flat) compared to the equivalent reducing balance rate (which might be around 9-10%), making the offer look more attractive to borrowers.
function calculateFlatRateEMI() {
// Get input values
var p = parseFloat(document.getElementById('principalAmt').value);
var r = parseFloat(document.getElementById('flatRate').value);
var tVal = parseFloat(document.getElementById('tenureVal').value);
var tType = document.getElementById('tenureType').value;
var errorDiv = document.getElementById('errorMsg');
var resultDiv = document.getElementById('resultBox');
// Reset display
errorDiv.style.display = 'none';
resultDiv.style.display = 'none';
// Validation
if (isNaN(p) || p <= 0 || isNaN(r) || r < 0 || isNaN(tVal) || tVal <= 0) {
errorDiv.style.display = 'block';
return;
}
// Normalize Tenure to Years and Months
var years = 0;
var months = 0;
if (tType === 'years') {
years = tVal;
months = tVal * 12;
} else {
years = tVal / 12;
months = tVal;
}
// Logic: Flat Rate Calculation
// Interest = P * R * T / 100
var totalInterest = (p * r * years) / 100;
// Total Payable = P + Interest
var totalPayable = p + totalInterest;
// EMI = Total Payable / Months
var emi = totalPayable / months;
// Display Results
document.getElementById('resEMI').textContent = emi.toFixed(2);
document.getElementById('resPrincipal').textContent = p.toFixed(2);
document.getElementById('resInterest').textContent = totalInterest.toFixed(2);
document.getElementById('resTotal').textContent = totalPayable.toFixed(2);
document.getElementById('resMonths').textContent = Math.round(months) + ' Months';
resultDiv.style.display = 'block';
}