.calculator-container {
max-width: 800px;
margin: 20px auto;
background: #fff;
padding: 30px;
border-radius: 12px;
box-shadow: 0 4px 20px rgba(0,0,0,0.08);
font-family: 'Segoe UI', Tahoma, Geneva, Verdana, sans-serif;
}
.calc-header {
text-align: center;
margin-bottom: 30px;
border-bottom: 2px solid #f0f2f5;
padding-bottom: 20px;
}
.calc-header h2 {
color: #2c3e50;
margin: 0;
font-size: 28px;
}
.calc-grid {
display: grid;
grid-template-columns: 1fr 1fr;
gap: 30px;
}
.input-section {
background: #f8f9fa;
padding: 25px;
border-radius: 8px;
border: 1px solid #e9ecef;
}
.result-section {
background: #eef2f7;
padding: 25px;
border-radius: 8px;
border: 1px solid #dfe6ed;
display: flex;
flex-direction: column;
justify-content: center;
}
.form-group {
margin-bottom: 20px;
}
.form-group label {
display: block;
margin-bottom: 8px;
font-weight: 600;
color: #495057;
font-size: 14px;
}
.form-group input, .form-group select {
width: 100%;
padding: 12px;
border: 1px solid #ced4da;
border-radius: 6px;
font-size: 16px;
transition: border-color 0.2s;
box-sizing: border-box;
}
.form-group input:focus {
border-color: #4a90e2;
outline: none;
box-shadow: 0 0 0 3px rgba(74, 144, 226, 0.1);
}
.calc-btn {
width: 100%;
background: #2c3e50;
color: white;
border: none;
padding: 15px;
font-size: 16px;
font-weight: bold;
border-radius: 6px;
cursor: pointer;
transition: background 0.2s;
margin-top: 10px;
}
.calc-btn:hover {
background: #1a252f;
}
.result-card {
background: white;
padding: 15px;
margin-bottom: 15px;
border-radius: 6px;
box-shadow: 0 2px 4px rgba(0,0,0,0.05);
}
.result-label {
font-size: 13px;
color: #6c757d;
text-transform: uppercase;
letter-spacing: 0.5px;
margin-bottom: 5px;
}
.result-value {
font-size: 24px;
font-weight: 700;
color: #2c3e50;
}
.highlight-apr {
border-left: 5px solid #e74c3c;
background: #fff5f5;
}
.highlight-apr .result-value {
color: #e74c3c;
}
.highlight-flat {
border-left: 5px solid #3498db;
}
.comparison-text {
font-size: 14px;
color: #555;
margin-top: 15px;
line-height: 1.5;
background: #fff;
padding: 10px;
border-radius: 4px;
}
.seo-content {
margin-top: 40px;
line-height: 1.7;
color: #333;
}
.seo-content h3 {
color: #2c3e50;
margin-top: 30px;
}
.seo-content p {
margin-bottom: 15px;
}
.alert-box {
background-color: #fff3cd;
border: 1px solid #ffeeba;
color: #856404;
padding: 15px;
border-radius: 6px;
margin-bottom: 20px;
display: none;
}
@media (max-width: 768px) {
.calc-grid {
grid-template-columns: 1fr;
}
}
Please enter valid numeric values greater than zero.
Monthly Payment (Based on Flat Rate)
0.00
Total Interest Payable
0.00
Enter your loan details to see the difference between the quoted Flat Rate and the actual APR.
Why Flat Rate is Deceptive
When shopping for car loans, personal loans, or equipment financing, lenders often quote a "Flat Interest Rate." On the surface, a 5% Flat Rate looks much cheaper than a 9% APR (Annual Percentage Rate). However, this is a common mathematical illusion used in sales.
The difference lies in how interest is calculated:
- Flat Rate: Interest is charged on the original full loan amount for every single year of the term, regardless of how much you have already paid off.
- APR (Reducing Balance): Interest is charged only on the outstanding balance. As you pay down the loan, you pay less interest.
How This Calculator Works
Because you are paying interest on money you have already repaid with a Flat Rate loan, the effective cost of borrowing is significantly higher. This calculator performs two steps:
- It calculates your monthly repayment based on the simple Flat Rate formula:
(Principal + (Principal × Rate × Years)) ÷ Months.
- It then reverse-engineers the APR required to generate that same monthly payment on a standard reducing balance schedule.
The "Double It" Rule of Thumb
As a general rule for standard loan terms (3-5 years), the true APR is roughly 1.8 to 2 times the Flat Rate. For example, if a car dealer offers you a "6% Flat Rate," the actual APR you are signing up for is likely around 11-12%. Always ask for the APR to make a fair comparison with bank loans.
function calculateAprConversion() {
// 1. Get Inputs
var principal = parseFloat(document.getElementById('principalAmount').value);
var flatRate = parseFloat(document.getElementById('flatRateInput').value);
var months = parseFloat(document.getElementById('loanTermInput').value);
var fees = parseFloat(document.getElementById('upfrontFees').value);
var errorBox = document.getElementById('calcError');
var comparisonText = document.getElementById('comparisonText');
// 2. Validation
if (isNaN(principal) || isNaN(flatRate) || isNaN(months) || principal <= 0 || months <= 0) {
errorBox.style.display = 'block';
return;
}
if (isNaN(fees)) fees = 0;
errorBox.style.display = 'none';
// 3. Flat Rate Calculation Logic
// Flat Interest = Principal * (Rate/100) * (Years)
var years = months / 12;
var totalInterestFlat = principal * (flatRate / 100) * years;
// Total Amount to be repaid = Principal + Interest
var totalPayable = principal + totalInterestFlat;
// Monthly Installment
var monthlyPayment = totalPayable / months;
// 4. Calculate APR (Iterative Newton-Raphson Method)
// We need to find the rate 'r' (monthly) where:
// PV – Fees = Payment * [ (1 – (1+r)^-n) / r ]
// Note: Fees reduce the net amount received, increasing the APR.
var netPrincipal = principal – fees; // The actual money you get in hand (or asset value minus fees paid upfront)
// If fees are high enough to make netPrincipal 0) {
var guessRate = (flatRate / 100) / 12; // Initial guess
if (guessRate === 0) guessRate = 0.00001;
var epsilon = 0.0000001; // Precision
var maxIterations = 100;
var found = false;
for (var i = 0; i < maxIterations; i++) {
// Function f(r) = (r * PV) / (1 – (1+r)^-N) – Pmt
// Rearranging for standard annuity formula:
// Pmt = r * PV / (1 – (1+r)^-n)
// Let's solve for f(r) = (Pmt/PV) – (r / (1 – (1+r)^-n)) = 0
// Using standard financial iterative approach for 'r'
// f(r) = (Payment * (1 – (1+r)^-n) / r) – netPrincipal
var powTerm = Math.pow(1 + guessRate, -months);
var f_val = (monthlyPayment * (1 – powTerm) / guessRate) – netPrincipal;
// Derivative f'(r)
// This is complex, so we use a numeric approximation (Secant method variation)
// or simple Newton step: x_new = x – f(x)/f'(x)
// Let's use a simpler iteration specifically for APR solving:
// r_new = r_old – y/y'
var derivative = (monthlyPayment / guessRate) * ( (months * powTerm) / (1 + guessRate) – (1 – powTerm) / guessRate );
var nextRate = guessRate – (f_val / derivative);
if (Math.abs(nextRate – guessRate) < epsilon) {
guessRate = nextRate;
found = true;
break;
}
guessRate = nextRate;
}
// Annualize the rate
apr = guessRate * 12 * 100;
}
// 5. Update UI
// Format Currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
document.getElementById('displayMonthly').innerHTML = formatter.format(monthlyPayment);
document.getElementById('displayTotalInterest').innerHTML = formatter.format(totalInterestFlat);
document.getElementById('displayTotalCost').innerHTML = formatter.format(totalPayable + fees); // Total cost includes fees paid
document.getElementById('displayAPR').innerHTML = apr.toFixed(2) + "%";
// Dynamic Comparison Text
var multiplier = (apr / flatRate).toFixed(1);
var diffText = "";
if (!isFinite(multiplier) || isNaN(multiplier)) {
diffText = "The APR could not be calculated with these parameters.";
} else {
diffText = "The
" + flatRate + "% Flat Rate is effectively equal to an
APR of " + apr.toFixed(2) + "%.The true cost of this loan is
" + multiplier + "x higher than the quoted flat rate suggests.";
}
comparisonText.innerHTML = diffText;
}