Why is the CGC Guarantee Fee in EIR (e.g. 2%) higher than the Flat Rate (e.g. 0.85%)?

This is due to how the rates are calculated.

A Flat Rate of 0.85% is calculated on your original loan amount. However, GXB Biz FlexiLoan uses the Effective Interest Rate (EIR) to provide total transparency.

The 2% EIR represents the same guarantee fee, but it is calculated against your reducing loan balance. As you pay down your principal, the base for calculation gets smaller, causing the percentage rate to appear higher even though the fee structure remains transparent, representing the actual cost of borrowing.