GreenFlow HP System Now Supports Reducing Balance Calculation

We are excited to announce that GreenFlow HP System now supports Reducing Balance (also known as Diminishing Balance) interest calculation — in addition to the existing Rule 78 method. This update gives motorcycle and car dealers the flexibility to match any financial institution's requirement.

What is Reducing Balance?

Under the Reducing Balance method, interest is calculated on the outstanding loan balance each month. As the borrower repays the principal, the interest decreases over time — unlike the Rule 78 method where interest is front-loaded.

Key Differences: Rule 78 vs Reducing Balance

• Rule 78: Interest is pre-calculated and weighted toward early months — common for in-house HP
• Reducing Balance: Interest recalculated monthly on remaining balance — used by banks and finance companies
• GreenFlow supports both methods within the same system
• Auto-generates correct instalment schedules for each method
• Accurate early settlement calculations for both methods

Who Benefits from This Update?

Dealers who work with multiple financial institutions — some using Rule 78 and others using Reducing Balance — can now manage all hire purchase agreements in one system. No more manual calculations or separate spreadsheets.