Reverse-engineer the annual interest rate from the loan amount, EMI and number of months.
Interest Rate Calculator
The Interest Rate Calculator works backwards from your EMI, loan amount, and tenure to reveal the effective interest rate you are actually being charged.
Reverse-engineer the rate
Lenders often quote an EMI without making the rate obvious, or advertise a "flat" rate that hides the true cost. Given the principal, the monthly EMI, and the number of months, this tool solves for the reducing-balance interest rate iteratively - so you can see the real annual percentage and compare offers on equal terms.
Flat vs reducing rate
A flat rate charges interest on the full original amount for the whole term, which makes the effective (reducing-balance) rate nearly double. If a lender quotes a flat rate, use this calculator on the resulting EMI to uncover the true reducing-balance rate before you commit.
Frequently Asked Questions
Why calculate the interest rate from the EMI?
Because lenders sometimes quote only the EMI or a misleading flat rate. Deriving the reducing-balance rate lets you compare loans honestly.
What is the difference between flat and reducing rates?
A flat rate charges interest on the full original principal throughout, so its effective reducing-balance rate is much higher - often close to double.
What inputs do I need?
The loan amount (principal), the monthly EMI, and the number of monthly instalments.
Is the calculated rate exact?
It is a precise reducing-balance estimate. Small differences from a lender's figure can arise from fees or rounding conventions.
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