### Fincrew Flat to Effective Interest Rate Calculator

Proper money management often requires that individuals be intimately familiar with various mathematical concepts. This principle holds when handling activities like calculating interest rates in all their forms. However, even if you’re very conversant with simple interest and compound interest formula sets, there’s still a real chance you could commit a human error while making your calculation. And, considering what’s at stake, we’re confident that this is something you’d like to avoid if you can. To that end, we’ve created our effective interest rate calculator and annual interest rate calculator! With this handy tool at your disposal, you don’t need to worry about aligning variables like the principal amount of money owed, the stated interest rate, or the short/long-term duration you should pay it back in! You have to input each variable into the right field and sit back. In mere seconds, you’ll have the exact monthly instalment amount you’ll need to pay from your savings account to clear that loan in the expected time frame! What’s more, our tool also functions as a superb flat to effective interest rate calculator. You won’t even need to bring out a pen to convert simple interest rates into their equivalent interest value. To better understand the various terms in loan rate calculation, you should know a few things.

### Flat Interest Rate – All You Need To Know

It is a nominal interest rate mainly applied when dealing with a car loan or a personal loan. All flat interest rates are at a fixed percentage. For example, if you take out a personal loan of RM 50 000 at a flat interest rate of 10% with a relatively long-term tenure of 5 years, you’ll pay that 10% interest on RM 50 000 you collected every year. Even if you’ve already paid RM 40 000, you’ll still pay a 10% interest rate on RM 50 000 you initially collected until you pay your loan.

### Effective Interest Rate – All You Need To Know

Some often refer to the effective annual interest rate as the reducing balance rate. It differs profoundly from the flat interest rate in that after every instalment you pay, you won’t pay interest on the principal amount you initially collected. Instead, you’ll only be paying interest on the loan amount left to pay. Below is how to calculate the effective interest rate in Malaysia today. If you take out a personal loan of RM 100 000 at a flat interest rate of 5% with a tenure of 10 years, you only get charged that 10% interest rate on the remaining balance of your loan during the compounding period.

Because of this, you’ll only pay about RM 27 300 in interest alone.

### Critical Differences Between Flat And Effective Interest Rate

There are three (3) main distinguishing factors between these two interest rates, even when they share the same number of compounding periods. The first is that with a flat interest rate, you tend to pay almost double what you would with an effective interest rate. It makes flat interest rates the more expensive loan type to collect. The second is that with a flat interest rate, you always pay interest on the total principal amount you collected for the entire duration of the loan. It is as opposed to an effective interest rate where the amount of money you pay interest on reduces after each instalment. The third and last difference is that flat interest rate loans have a fixed interest payment while effective interest rate operates a decreasing interest payment amount.

### Why Use FinCrew Flat to Effective Interest Rate Calculator

Our flat to effective interest rate calculator is the best option for you if you want to accurately figure out just how much you will pay to your lender each month. While it’s always a good idea to know how to calculate interest rates yourself, the fact remains that this process can get convoluted the farther along you get with your loan payment. With our tool in your corner, you won’t need to know how to calculate effective interest rates, as we’ll give you all the data you need to know at a glance. It does a lot to make the entire loan payment process a little easier for you, but it can also contribute significantly to helping you plan your finances better further down the road.

### What Variables Does Our Calculator Need to Work?

All we need for accurate loan rate calculation is your Total Loan, the Tenure, and the Interest Rate (per annum). Our sophisticated algorithms will take care of the rest!