FLAT INTEREST refers to charging interest on the full original loan amount, rather than on the declining balance. With group based loans, for example, a common "interest rate" is "3% per month, flat, for 4 months". This means that a $100 principal amount lent is multiplied by 3, and then by 4 months to come up with $12 in interest. Thus, $112 would be repaid over 4 months in equal installments.
Barry Goldsmith
| APA | Barry Goldsmith. (2010). flat interest. Retrieved September 22, 2026, from http://smartdefine.org/flat_interest/definitions/1154194 |
| Chicago | Barry Goldsmith. 2010. "flat interest" http://smartdefine.org/flat_interest/definitions/1154194 (accessed September 22, 2026). |
| Harvard | Barry Goldsmith 2010, flat interest, Smart Define, viewed 22 September, 2026, <http://smartdefine.org/flat_interest/definitions/1154194>. |
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