Loan & Installment Calculator
Find your monthly installment, total interest and repayment schedule for a personal, car or home loan. Compare flat-rate and reducing-balance loans side by side.
النسخة العربية ↗How to use the loan calculator
- Choose the interest method: reducing balance (how most banks quote mortgages and personal loans) or flat rate (common for car finance in the Gulf).
- Enter the loan amount, the annual interest rate and the term in years and months.
- See your monthly installment, total interest and total repayment. For reducing-balance loans, open the yearly schedule to see how the balance falls.
Flat rate vs reducing balance
This is the single most important thing to understand before signing a loan. The two methods can show the same headline rate yet cost very different amounts.
With a reducing-balance loan, interest is charged only on what you still owe. Each payment reduces the balance, so the interest part of each installment shrinks over time.
With a flat-rate loan, interest is charged on the original amount for the whole term, even though you are paying it down every month. A 3% flat rate is therefore much more expensive than a 3% reducing rate. Our calculator shows the equivalent reducing rate (APR) so you can compare offers fairly.
| Loan of 100,000 over 5 years | Monthly | Total interest |
|---|---|---|
| 5% reducing balance | 1,887.12 | 13,227.40 |
| 3% flat rate | 1,916.67 | 15,000.00 |
In this example the 3% flat loan costs more than the 5% reducing loan. Its true equivalent rate is about 5.6%.
The formulas
Flat: M = (P + P × R × years) ÷ n
P = amount, n = number of months,
r = annual rate ÷ 12, R = annual flat rate
Frequently asked questions
How is a monthly loan installment calculated?
For a reducing-balance loan the calculator uses the standard amortisation formula. For a flat-rate loan it adds total interest to the amount borrowed and divides by the number of months.
Is a flat rate cheaper than a reducing rate?
Usually not. A flat rate charges interest on the full original amount for the whole term, so its real cost is close to double the headline rate.
What is APR?
The annual percentage rate shows the yearly cost of borrowing on a reducing basis. It lets you compare loans quoted in different ways.
Can I see how much interest I pay each year?
Yes. With the reducing-balance method, open “Show yearly repayment schedule” to see principal, interest and remaining balance for every year.
Does this include bank fees or insurance?
No. It covers interest only. Add any fees your bank lists to get the full cost.
