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# Excel based calculator to convert flat interest rate to diminishing interest rate

There are generally two types of rate of interest prevailing in India

Flat interest rate
Diminishing or reducing interest rate

Flat interest rate- in this type of rate of interest, the borrower needs to pay interest on all the tenure. Means the borrower need to pay interest on the amount already paid via EMI. Like if A has borrowed Rs. 100000 on 10% flat interest rate for tenure of 5 years, he will pay 2500 rs. EMI for the 60 months.  In this term the borrower pays Rs. 50000 as interest on Rs. 100000 loan. Private financial institute often offer flat rate of interest.

Diminishing interest rate- in this type of rate of interest, the borrower needs to pay interest on the remaining amount and not the full. Like if a has borrowed Rs. 100000 on 10% diminishing rate of interest for a tenure of 5 years, the EMI will be Rs. 2125. That means the borrower pays Rs. 27500 as interest on Rs. 100000 loan.

How to convert flat rate of interest on diminishing rate of interest

This includes complex calculations. But this is an excel based calculator which will make complex calculations very easy.

Tags-flat interest rate,change flat rate to dimnishing rate,flat interest rate vs dimnishing interest rate

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