Flat rate or reducing balance: what your loan actually costs

A flat rate charges interest on the amount you originally borrowed, for every month of the tenor. A reducing-balance rate charges interest only on what is still outstanding. Same headline percentage, different total cost.

The practical test is simple: ask for the total repayment figure and the monthly instalment in writing, then compare those two numbers across lenders. A rate is a description; the repayment schedule is the fact.

On this site, the calculator shows both the instalment and the total cost of credit before you apply, so there is nothing to reverse-engineer.