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Dua Penawaran Kredit, Dua Cara Berhitung: Kenapa Bunga Flat Selalu Lebih Mahal dari Angkanya
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Two Credit Offers, Two Calculation Methods: Why Flat Interest is Always More Expensive Than It Seems

Tim Taalenta · 6 September 2026

Two offers landed on the table in the same week. One mentioned a flat interest rate of 0.7 percent per month. The other mentioned an effective interest rate of 15 percent per year. The first figure seems much lighter, and therein lies the problem: the two figures are not measuring the same thing, so comparing them directly can be misleading.

The basis of calculation is different, not the amount

The Financial Services Authority distinguishes between the two based on the calculation method. Flat interest is calculated from the initial principal loan amount throughout the tenor, so the installments remain the same from the first month to the last. Effective interest is calculated from the remaining principal that has not been paid, so the portion of interest decreases each month. Because in the flat scheme your remaining debt decreases but the interest does not, the actual burden is always greater than the figure stated.

The habit of quoting them is also different. Financing companies and cooperatives commonly refer to flat, while banks typically refer to effective. This difference in habit makes the more expensive offer sound cheaper.

How big is the difference

Take a loan of Rp60,000,000 with a tenor of 36 months and a flat interest rate of 8 percent per year. The total interest is Rp14,400,000, making the installment Rp2,066,667 per month. That same cash flow, if recalculated based on the remaining principal, is equivalent to an effective interest rate of about 14.55 percent per year. Almost double the figure in the brochure.

This pattern is quite stable. For tenors of 12 to 48 months and flat interest rates of 6 to 12 percent per year, the equivalent effective figures fall in the range of 1.7 to 1.9 times. As a rough guideline in your head, multiply by about 1.8. A flat rate of 6 percent with a tenor of 12 months is equivalent to an effective rate of 10.90 percent. A flat rate of 12 percent with a tenor of 12 months is equivalent to 21.46 percent. This guideline is sufficient for filtering, but the final decision should ideally use the actual offer figures.

Upfront costs change the figures again

Provisions, administrative fees, and insurance premiums are generally deducted from the disbursement. This means the money you actually receive is less than the principal being repaid, while the installments are still calculated from the full principal. In the example above, an upfront deduction of 3 percent makes the disbursed funds Rp58,200,000, and the effective interest rate rises from 14.55 percent to about 16.71 percent. This additional two percent difference almost never appears in brochures.

Another consequence of the flat scheme often only becomes apparent later: because the interest is already pegged to the initial principal, repaying faster does not automatically reduce the interest proportionally. Ask about the rules for early repayment from the start, not when you are already looking to settle.

Requesting the effective figure is not an unusual request

OJK Regulation Number 13 of 2024 on Transparency and Publication of Basic Credit Interest Rates, effective from December 8, 2024, positions the Basic Credit Interest Rate as an indication of the lowest effective interest rate, and requires conventional commercial banks to pay attention to consumer protection in the form of notifications of interest rate changes and conversion from flat to effective in the offering letter.

In a broader scope, OJK Regulation Number 22 of 2023 on Consumer and Community Protection in the Financial Services Sector, effective from December 22, 2023, and replacing POJK 6/POJK.07/2022, contains eleven enhancements. One of them requires the inclusion of costs and commissions for marketing agents or intermediaries in the agreement. Therefore, requesting details of costs and equivalent effective figures is something that should indeed be available.

How to compare equivalently

First, translate all offers into a single unit, which is the effective interest rate per year after accounting for upfront costs, and then compare. If you want to simplify the calculations, there is a flat and effective interest comparison tool that calculates both simultaneously. Such results are useful for equating offers, and should still be matched with official simulations from the lender, as rounding, interest days, penalties, and insurance can differ.

Sources

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Ditulis oleh Tim Taalenta