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 RM120,000 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

---

Credit score rating in Malaysia

Credit score rating 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 website:
Your Credit Score Rating - Plans & Tips

---

List of banks in Malaysia

No.	Bank Name	Bank website
1	Affin Bank Berhad	Affin Bank
2	Alliance Bank Malaysia Berhad	Alliance Bank
3	AmBank (M) Berhad	AmBank
4	BNP Paribas Malaysia Berhad	BNP Paribas Malaysia
5	Bangkok Bank Berhad	Bangkok Bank
6	Bank of America Malaysia Berhad	Bank of America Malaysia
7	Bank of China (Malaysia) Berhad	Bank of China Malaysia
8	Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad	MUFG Bank Malaysia
9	CIMB Bank Berhad	CIMB Bank
10	Citibank Berhad	Citibank
11	Deutsche Bank (Malaysia) Berhad	Deutsche Bank Malaysia
12	HSBC Bank Malaysia Berhad	HSBC Malaysia
13	Hong Leong Bank Berhad	Hong Leong Bank
14	India International Bank (Malaysia) Berhad	India International Bank
15	Industrial and Commercial Bank of China (Malaysia) Berhad	ICBC Malaysia
16	J.P. Morgan Chase Bank Berhad	J.P. Morgan Malaysia
17	Malayan Banking Berhad	Maybank
18	Mizuho Bank (Malaysia) Berhad	Mizuho Bank Malaysia
19	National Bank of Abu Dhabi Malaysia Berhad	NBAD Malaysia
20	OCBC Bank (Malaysia) Berhad	OCBC Malaysia
21	Public Bank Berhad	Public Bank
22	RHB Bank Berhad	RHB Bank
23	Standard Chartered Bank Malaysia Berhad	Standard Chartered Malaysia
24	Sumitomo Mitsui Banking Corporation Malaysia Berhad	SMBC Malaysia
25	The Bank of Nova Scotia Berhad	Scotiabank Malaysia
26	The Royal Bank of Scotland Berhad	Royal Bank of Scotland
27	United Overseas Bank (Malaysia) Bhd.	UOB Malaysia
28	Affin Islamic Bank Berhad	Affin Islamic Bank
29	Al Rajhi Banking & Investment Corporation (Malaysia) Berhad	Al Rajhi Bank Malaysia
30	Alliance Islamic Bank Berhad	Alliance Islamic Bank
31	AmBank Islamic Berhad	AmBank Islamic
32	Asian Finance Bank Berhad	Asian Finance Bank
33	Bank Islam Malaysia Berhad	Bank Islam
34	Bank Muamalat Malaysia Berhad	Bank Muamalat
35	CIMB Islamic Bank Berhad	CIMB Islamic
36	HSBC Amanah Malaysia Berhad	HSBC Amanah
37	Hong Leong Islamic Bank Berhad	Hong Leong Islamic Bank
38	Kuwait Finance House (Malaysia) Berhad	Kuwait Finance House
39	Maybank Islamic Berhad	Maybank Islamic
40	OCBC Al-Amin Bank Berhad	OCBC Al-Amin Bank
41	Public Islamic Bank Berhad	Public Islamic Bank
42	RHB Islamic Bank Berhad	RHB Islamic Bank
43	Standard Chartered Saadiq Berhad	Standard Chartered Saadiq
44	Affin Hwang Investment Bank Berhad	Affin Hwang Investment Bank
45	Alliance Investment Bank Berhad	Alliance Investment Bank
46	AmInvestment Bank Berhad	AmInvestment Bank
47	CIMB Investment Bank Berhad	CIMB Investment Bank
48	Hong Leong Investment Bank Berhad	Hong Leong Investment Bank
49	KAF Investment Bank Berhad	KAF Investment Bank
50	Kenanga Investment Bank Berhad	Kenanga Investment Bank
51	MIMB Investment Bank Berhad	MIMB Investment Bank
52	Maybank Investment Bank Berhad	Maybank Investment Bank
53	Public Investment Bank Berhad	Public Investment Bank
54	RHB Investment Bank Berhad	RHB Investment Bank
55	Al Rajhi Banking & Investment Corporation	Al Rajhi Bank
56	Deutsche Bank Aktiengesellschaft	Deutsche Bank
57	PT Bank Muamalat Indonesia, Tbk	Bank Muamalat Indonesia

Source: List of Onshore Banks in Malaysia - Bank Negara Malaysia

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!

Other loan calculators in Malaysia:

• Loan Calculator
• Car Loan Calculator
• Home Loan Calculator
• Personal Loan Calculator