People always ask whether to get a flat rate or reducing balance for personal loan. Below is my analysis and make your own decision.
comparison:
1.RM10k, 2.5%/year flat rate=RM250 interest, each month pay RM854.17
2.RM10k, 1.5%/month reducing balance, each month also pay RM850, interest?
Jan-interest RM150 based on 10000k balance
February- RM137.25 based on 9150 balance
I don't even need to calculate until march you see and the interest is already RM287.25
This is not exactly rocket science people, hello!!!
Unless you can pay off all your loan in lump sum in 1 or 2 months, you know what you can choose
