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Interest Rate Method (PD2691)

Describes the method(s) used by the organization to state the interest rate of its products. Select all that apply:
- Declining balance method
- Flat interest method
Reporting format
Metric type
Metric level
IRIS metric citation
IRIS, 2016. Interest Rate Method (PD2691). v4.0.


Organizations that use multiple interest rate methods should footnote the number of products to which each method applies.

Usage Guidance

  • Interest payment amounts depend on both the interest rate stated and on the method used to calculate it.
  • With the declining balance method, also known as reducing balance method, interest is charged only on the product amount that the borrower still holds.
  • With the flat rate method, interest is charged on the full original product amount throughout the product term.
    This metric is not intended to capture amortization schedules on debt products (e.g., straight line, declining balance, bullet, balloon, increasing balance, or others).