Loan Type Comparison

Principal / Loan Amount

₹

₹1,000₹1,00,00,000

Rate (% per month)

%/mo

0.25%/mo10%/mo

Duration (Months)

3240

Same money, same rate (2.00% per month = 24.00% per year), same 24 months — three ways of charging it.

Reducing Balance (EMI)

How banks charge

Costs least

EMI / month₹5,287

Total Interest₹26,891

Total paid₹1,26,891

Loan fully repaid with the last EMI

Flat Rate

Interest on full amount throughout

Costs most

EMI / month₹6,167

Total Interest₹48,000

Total paid₹1,48,000

Loan fully repaid with the last EMI

Interest-Only (Mahajani)

Byaj monthly, principal at end

Byaj / month₹2,000

Total Interest₹48,000

Total paid₹1,48,000

Plus ₹1,00,000 principal in the final month

At the same quoted rate, interest-only always costs the most (the principal never shrinks) and reducing balance the least. A flat rate sits between — roughly equal to a reducing-balance loan at nearly double the quoted rate. Compare quotes on total paid, never on the quoted percentage.

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What is Loan Type Comparison?

The same loan can be quoted three ways in India, and the words decide the cost. A bank quotes a reducing-balance rate — interest is charged only on what you still owe. A financier quoting a "flat" rate charges interest on the FULL original amount every month, even as you repay it. And traditional mahajani lending is interest-only: byaj every month, the whole principal returned at the end. At the same quoted percentage these three produce very different totals, and comparing quotes without converting them is how borrowers overpay.

How to use VyajPay's Loan Type Comparison?

Enter the amount, the monthly rate, and the duration once. The calculator works all three structures out side by side — the monthly payment, the total interest and the total you would hand over — and marks which structure costs the least and the most for your numbers. Use the WhatsApp share to send the comparison to the other party before you agree on the structure, not after.

Adjust the sliders or type values to match your scenario.

Watch the donut chart update live — blue arc = your returns.

Read the result summary below the inputs for the final numbers.

Why use VyajPay's Loan Type Comparison?

The only Indian calculator that compares flat, reducing and interest-only from one input

Shows the real gap in rupees, not percentages — the number people actually argue about

A flat rate roughly equals a reducing-balance loan at nearly double the quoted rate

Matches the three loan types VyajPay tracks in the app, so what you agree is what you record

Frequently Asked Questions

Because flat-rate interest is charged on the full original loan every month, even after you have repaid most of it. On a reducing-balance loan each EMI shrinks the amount interest is charged on. As a rule of thumb, a flat rate is equivalent to a reducing rate of nearly twice the number.

Interest-only has the lowest monthly outgo — you pay only the byaj — but the highest total cost, because the principal never shrinks and is due in full at the end.

Convert both to a monthly percentage (₹2 sekda = 2% per month = 24% per year), enter it here, and compare on the TOTAL PAID column. The quoted percentage alone cannot be compared across structures.

Yes — the app supports reducing-balance (EMI), flat-rate and interest-only loans, and computes each one the same way this comparison does.