Compare two loan offers
Same need, two offers. Compare what you actually receive, what you repay, and the APR, including "flat rate" quotes.
APR = monthly internal rate of return of (amount received, equal EMIs) × 12, as in RBI's KFS illustration. Your KFS APR may differ slightly because of dates and rounding. If it differs a lot, ask the lender why.
Flat rate vs reducing balance
A flat rate charges interest on the full original amount for the whole loan, even as you repay. So a 12% flat rate costs roughly what a 21–22% reducing rate would over a year. Always compare the APR in each Key Facts Statement.
Read: How to read a KFS · Small EMI, big cost
How to read your loan comparison
Two loan offers can quote different rates, fees and rate types. This tool puts them on the same footing. You see what each offer pays into your account, what you repay in total, and the APR (the yearly cost of the loan, including fees).
What the numbers mean
“You receive” is the loan amount minus the fees and charges taken out at the start. It is the money that actually reaches you.
EMI is the fixed monthly payment. “Total repaid” is the EMI times the number of months.
“Interest + fees” adds the interest to everything deducted at the start. It is the full price of the loan in rupees.
“Equivalent reducing rate” matters for flat-rate quotes. A flat rate charges interest on the full amount for the whole loan, even after you have repaid part of it. A reducing-balance rate charges interest only on what you still owe. We convert a flat rate into the reducing rate that gives the same EMI. For a reducing-balance offer, this line repeats the quoted rate.
APR is the last line and the most useful one. It includes both interest and fees, worked out the same way as the example in RBI’s Key Facts Statement (KFS, the standard one-page summary of a loan). On the lines above it, green marks the better figure.
The status box names the offer with the lower APR. If the two offers pay out different amounts or run for different months, it says so. Then also compare the total cost and whether the EMI fits your weak month.
Worked example
Fictional example, using the tool’s default inputs. Both offers lend ₹1,00,000 for 12 months. Offer A quotes 12% flat, with ₹2,360 in fees. Offer B quotes 18% reducing, with ₹1,180 in fees. (Those fees are 2% and 1% of the loan, each with 18% GST.)
| Offer A | Offer B | |
|---|---|---|
| You receive | ₹97,640 | ₹98,820 |
| EMI | ₹9,333 | ₹9,168 |
| Total repaid | ₹1,12,000 | ₹1,10,016 |
| Interest + fees | ₹14,360 | ₹11,196 |
| Equivalent reducing rate | 21.5% | 18.0% |
| APR (interest + fees) | 26.1% | 20.3% |
Offer A’s “12%” looks cheaper than 18%. In fact, it costs more on every line. The status reads “Offer B has the lower APR”. It also notes that the amounts received differ, so you should look at the total cost too.
What this tool doesn’t do
It assumes equal monthly payments and fees taken at the start. Loans with weekly instalments or one big final payment need the lender’s own schedule. For weekly or fortnightly microfinance loans, use the microfinance offer comparator.
Your KFS APR may differ a little because of dates and rounding. If it differs a lot, ask the lender why.
It leaves out penal charges (extra charges for paying late) and prepayment terms. Read those in each KFS. We don’t rank lenders, and the amounts you type stay on your device.
Common questions
Is a flat rate the same as a reducing rate? No. A flat rate charges interest on the full amount for the whole loan. On a one-year loan, 12% flat costs roughly what a 21–22% reducing rate would.
Should I pick the offer with the lower EMI? Not on its own. A longer loan has a smaller EMI but costs more in total. Compare the APR and the total repaid for the same amount and tenure (loan length).
Why is the APR higher than the interest rate? Because fees are taken out before you get the money, while you still repay the full loan. The KFS must include all charges in the APR, including third-party charges the lender collects.
Where do I find these numbers? In each lender’s KFS. Banks and NBFCs (finance companies that are not banks) must give it to you before you sign most personal and small-business loans.