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Lenders calculate loan interest in two ways: flat interest rate and reducing interest rate. Both methods of calculation result in a different interest amount payable by you, the borrower, Flat Interest Rate: As the title suggests, a flat interest rate is one that is computed on the whole amount of the loan during its duration, without taking into account the fact that monthly EMIS slowly reduce the principal amount. As a result, the Effective Interest Rate is significantly greater than the initi
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