Credit
Interest Rate Converter
Convert between flat (add-on) rates and effective interest rates (EIR). Understand the true cost of your loan beyond the advertised rate.
Interest Rate Converter
Convert flat monthly rates to effective interest rates (EIR) and factor rates.
How This Tool Works
How It Works
Philippine banks advertise add-on (flat) interest rates, but the true cost (Effective Interest Rate) is significantly higher. This tool converts between them.
Why EIR Matters
With add-on interest, you pay interest on the original principal every month, even though your balance decreases. The EIR accounts for this and shows the real annual cost.
Typical Conversion
- 0.99% monthly flat rate ≈ 21-23% EIR per annum
- 1.25% monthly flat rate ≈ 27-29% EIR per annum
Outputs
- Flat Rate: Monthly and annual add-on rate
- Total Interest %: Total interest as percentage of principal
- EIR: Monthly and annual effective rate
- Factor Rate: The multiplier per month (monthly payment / principal)