Calculation
Option A
Original principal
Option B
Remaining principal
FAQ Guide
Flat Rate vs Reducing Balance Loans
Reducing-balance interest is calculated on the remaining principal; flat-rate calculations can look simpler but may not reflect the same effective cost.
Quick comparison
Transparency
Option A
Simple-looking
Option B
Closer to amortization
Review need
Option A
Effective cost
Option B
Payment schedule
Questions and answers
Why compare both?
Two offers can use different terminology and appear cheaper until you compare total repayment.
What should I ask a lender?
Ask for total repayment, fees, annualized rate, and early repayment rules.
Is this financial advice?
No. Treat calculator output as planning context and verify terms before deciding.