Convert flat interest rate to reducing balance interest rate-Excel calculator

Flat rate to reducing balance rate Excel calculator

Few banks in UAE quote their interest rates in Flat rate. I have previously written on Personal Loan interest rate. Read it HERE.

A flat rate is a type of interest rate which is calculated on the entire amount of loan throughout its tenure. For example, if you take a car loan for AED 50,000 the interest charged is, let’s say 5%. Now this 5% is charged on the entire AED 50,000 throughout the tenor.A reducing balance interest rate is the one where the interest is charged on the outstanding principal amount after monthly deductions.

Borrowers need to beware of the banks charging flat rate of interest as this is not expressively published; but in most cases hidden in the ‘star’ mark. To make it easy for you to calculate what the effective rate of interest will be here is a calculator to covert Flat interest rate to a reducing balance interest rate.

Having your loan denominated in Reducing balance interest rate may save you a lot of money.

Download Excel:

I have received many emails asking me to provide the Reducing Balance to Flat rate excel calculator. You can download the excel calculator below by entering you details. It contains Ammortisation, Flat to Reducing and Reducing to Flat calculator. Once you enter your details, you will receive an email with the download file of Excel Calculator:

The download is not available at the moment.

I believe this will help you.


  1. Kashif says

    Hi, this is fascinating. I need to download the excel file for Convert flat interest rate to reducing balance interest rate-Excel calculator to learn the formula.

  2. Hemant says

    My question is if reducing roi is 15 % p/a ?

    1 . What is the flat roi?
    2 . What calculate should we use to know flat roi?

  3. suzanne says

    Hello. May I know how to convert flat interest rate to reducing balance? Is there any formula to convert it? what is the formula you use in the excel? I’m now a student studying finance and it is part of my assignment. My lecturer nee me to answer it. Hope to get answer from you. Thank you.

  4. Brigette says

    It’s difficult to find educated people on this subject, but you sound like you know what you’re talking about!

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