EMI Planner 
Verdiq The flat rate trap — why your car loan costs more than you think
A 10% flat rate can end up feeling much higher than it looks. Here is the math every car buyer should check before signing.
When a car salesperson says "we'll do this at 10% interest," ask one question: Is that flat rate or reducing balance?
If they say flat rate — and many car loans are quoted that way — the real cost is much higher than the headline number.
The math
Flat rate: interest is calculated on the original principal for every year of the loan, regardless of how much you've paid back. So ₹5 lakh at 10% flat for 3 years = ₹1.5 lakh total interest = ₹18,056 EMI.
Reducing balance: interest is calculated only on the outstanding balance, which falls every month as you pay. The same ₹5 lakh at 10% reducing for 3 years = ₹16,134 EMI — and your effective cost is around 10%.
The effective APR of a 10% flat rate loan? 18.7%.
How to check
Open EMI Planner, select Car loan, switch the toggle to Flat Rate, and enter your numbers. It shows the effective APR right away so you can see the real cost before signing.