Personal Loan Comparator

Which Method Should You Choose?

Almost always, the reducing balance method is more beneficial for borrowers. Even if the flat rate seems lower, the effective interest rate is typically much higher than the reducing balance rate. Most reputable financial institutions use the reducing balance method for personal loans, home loans, and car loans.

Always ask your lender which method they're using to calculate interest, and compare the total amount repaid rather than just the interest rate percentage.