Monthly Flat Rate/Actual Annual Interest Rate Calculator

What is a "Monthly Flat Rate/Actual Annual Interest Rate Calculator"?

The "Monthly Flat Rate/Actual Annual Interest Rate Calculator" is used to convert the Monthly Flat Rate to the actual annual interest rate for comparison of different loans, without needing to use MS Excel (spreadsheet).

Loans Calculated Using Monthly Flat Rate

The formula for calculating loans using monthly flat rate is as follows:

• A is the monthly repayment amount
• P is the loan amount (how much money you borrowed)
• r is the monthly interest rate of the loan (%)
• n is the number of repayment months

Example:

I borrowed ₹120,000 from the bank, if the monthly flat rate is 0.14%, to be repaid over 12 months, then my monthly instalment amount is:




For this example, borrower borrow loan with 0.14% monthly flat rate and 12 months repayment period, the actual annual interest rate is 3.09%

Please note that the monthly flat rate can be converted to the actual annual interest rate. When comparing loans, the annual interest rate should be used for comparison, and the lower actual annual interest rate, the better.

For convenience, a Loan Calculator has been provided on this website.

So how can the monthly flat rate be converted to the actual annual interest rate?

First, we need to understand the loan calculation method using the annual interest rate. To facilitate calculation, I will define the following variables:

• P₀ is the total loan amount (how much money you borrowed)
• R is the Annual Interest Rate
• r = R/12 is the monthly interest rate
• A is the monthly repayment amount
• n is the number of repayment months

In the first month, the principal you actually repaid is:



Therefore, the outstanding principal for the first month is:



Rewriting this, we get:



From the above formula, similarly, we can write it as:

(1)

We need to find a way to eliminate the n + 1 term, try:

(2)

(3)

(4)

Substitute (3) into (2):



After rearranging:

(5)

Substitute (4) into (5):

(6)

(7)

So (7) can also be written as:

(8)

Represents the outstanding loan for n-th month, which means when it comes to the last month this value is 0. So (8) can also be written as:

(9)

After rearranging:

(10)

Finally, r can be calculated, then multiply r by 12 to get the actual annual interest rate for the monthly flat interest loan!

The calculation results from the "Monthly Flat Interest Rate/Effective Annual Interest Rate Calculator" are for reference only, loan details must be confirmed with the relevant bank or financial institution first!

The above calculation for converting monthly flat rate to actual annual interest rate is referenced from the following website:
https://mitchellt.com/math/2018/08/11/derivation-of-monthly-payment-formula.html

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Credit score rating in India

Credit score rating (CIBIL score) is very important when you borrow money, it is because if your credit score rating is too low, you may not be able to borrow money! For more information about credit score rating, please visit the below websites:
CIBIL Score - How to Check, Calculate and Improve Credit Score
CIBIL Score | Credit Score | Credit Report | Loan Solutions | CIBIL

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List of banks in India

No.	Bank Name	Bank website
1	Allahabad Bank	https://www.allahabadbank.in/
2	Axis Bank	https://www.axisbank.com/
3	Bank of Baroda	https://www.bankofbaroda.in/
4	Bank of India	https://www.bankofindia.co.in/
5	Bank of Maharashtra	https://www.bankofmaharashtra.in/
6	Canara Bank	https://www.canarabank.com/
7	Central Bank of India	https://www.centralbankofindia.co.in/
8	HDFC Bank	https://www.hdfcbank.com/
9	ICICI Bank	https://www.icicibank.com/
10	IDBI Bank	https://www.idbibank.in/
11	Indian Bank	https://www.indianbank.in/
12	Indian Overseas Bank	https://www.iob.in/
13	Jammu & Kashmir Bank Ltd	https://www.jkbank.com/
14	Punjab and Sind Bank	https://www.psbindia.com/
15	Punjab National Bank	https://www.pnbindia.in/
16	State Bank of India	https://www.sbi.co.in/
17	UCO Bank	https://www.ucobank.com/
18	Union Bank of India	https://www.unionbankofindia.co.in/
19	Yes Bank Ltd.	https://www.yesbank.in/
20	Saptagiri Grameena Bank	https://www.saptagirigrameenabank.in/
21	Arunachal Pradesh Rural Bank	https://www.apruralbank.co.in/
22	Dakshin Bihar Gramin Bank	https://www.dbgb.in/
23	Uttar Bihar Gramin Bank	https://www.ubgb.in/
24	Chhattisgarh Rajya Gramin Bank	https://www.cgbank.in/
25	Baroda Gujarat Gramin Bank	https://www.bggb.in/
26	Saurashtra Gramin Bank	https://www.sgbrrb.org/
27	Sarva Haryana GB	https://shgb.co.in/
28	Karnataka Gramin Bank	https://karnatakagraminbank.com/
29	Kerala GB	https://keralagbank.com/
30	Meghalaya Rural Bank	http://www.meghalayaruralbank.co.in/
31	Mizoram Rural Bank	https://www.mizoramruralbank.in/
32	RRB Puduvai Bharathiar GB	https://www.puduvaibharathiargramabank.in/
33	RRB Punjab GB	https://pgb.org.in/
34	Baroda Rajasthan Kshetriya Gramin Bank	https://pgb.org.in/
35	Rajasthan Marudhara Gramin Bank	https://www.rmgb.in/
36	Andhra Pradesh Grameena Vikas Bank	https://www.apgvbank.in/
37	Telangana Grameena Bank	https://tgbhyd.in/
38	Prathama U.P. Gramin Bank	https://prathamaupbank.com/
39	Prathama UP GB	https://prathamaupbank.com/
40	Uttarakhand Gramin Bank	https://www.uttarakhandgraminbank.com/
41	UTTARBANGA KSHETRIYA GRAMIN BANK	https://www.ubkgb.org/
42	Tamilnad Mercantile Bank Ltd	https://www.tmb.in/
43	SOUTH INDIAN BANK	https://www.southindianbank.com/
44	City Union Bank	https://www.cityunionbank.com/

This "Monthly Flat Rate/Actual Annual Interest Rate Calculator" allows you to easily convert the monthly flat rate to the actual annual interest rate for loan comparison. Please help to share if you find this "Monthly Flat Rate/Actual Annual Interest Rate Calculator" useful! Thank you!

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