diff --git a/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/FlatInterestLoanScheduleGenerator.java b/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/FlatInterestLoanScheduleGenerator.java
index 5f3d8d7c0..bd66242aa 100644
--- a/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/FlatInterestLoanScheduleGenerator.java
+++ b/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/FlatInterestLoanScheduleGenerator.java
@@ -37,14 +37,14 @@ public class FlatInterestLoanScheduleGenerator extends AbstractLoanScheduleGener
             @SuppressWarnings("unused") TreeMap<LocalDate, Money> principalVariation,
             @SuppressWarnings("unused") Map<LocalDate, Money> compoundingMap, LocalDate periodStartDate, LocalDate periodEndDate,
             @SuppressWarnings("unused") Collection<LoanTermVariationsData> termVariations) {
-        
-        Money principalForThisInstallment = loanApplicationTerms.calculateTotalPrincipalForPeriod(calculator, outstandingBalance,
-                periodNumber, mc, null);
-
+    
         final PrincipalInterest result = loanApplicationTerms.calculateTotalInterestForPeriod(calculator,
                 interestCalculationGraceOnRepaymentPeriodFraction, periodNumber, mc, cumulatingInterestPaymentDueToGrace,
                 outstandingBalance, periodStartDate, periodEndDate);
         Money interestForThisInstallment = result.interest();
+        
+        Money principalForThisInstallment = loanApplicationTerms.calculateTotalPrincipalForPeriod(calculator, outstandingBalance,
+                periodNumber, mc, interestForThisInstallment);
 
         // update cumulative fields for principal & interest
         final Money interestBroughtForwardDueToGrace = result.interestPaymentDueToGrace();
diff --git a/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/LoanApplicationTerms.java b/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/LoanApplicationTerms.java
index b7aaf1271..fba0a39be 100644
--- a/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/LoanApplicationTerms.java
+++ b/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/LoanApplicationTerms.java
@@ -600,7 +600,7 @@ public final class LoanApplicationTerms {
 
         switch (this.interestMethod) {
             case FLAT:
-                principalForInstallment = calculateTotalPrincipalPerPeriodWithoutGrace(mc, periodNumber);
+                principalForInstallment = calculateTotalPrincipalPerPeriodWithoutGrace(mc, periodNumber, interestForThisInstallment);
             break;
             case DECLINING_BALANCE:
                 switch (this.amortizationMethod) {
@@ -878,19 +878,26 @@ public final class LoanApplicationTerms {
         return interestPerInstallment;
     }
 
-    private Money calculateTotalPrincipalPerPeriodWithoutGrace(final MathContext mc, final int periodNumber) {
+    private Money calculateTotalPrincipalPerPeriodWithoutGrace(final MathContext mc, final int periodNumber, Money interestForThisInstallment) {
         final int totalRepaymentsWithCapitalPayment = calculateNumberOfRepaymentsWithPrincipalPayment();
-        Money principalPerPeriod = this.principal.minus(totalPrincipalAccounted).dividedBy(totalRepaymentsWithCapitalPayment, mc.getRoundingMode()).plus(
-                this.adjustPrincipalForFlatLoans);
-        if (isPrincipalGraceApplicableForThisPeriod(periodNumber)) {
-            principalPerPeriod = principalPerPeriod.zero();
-        }
-        if (!isPrincipalGraceApplicableForThisPeriod(periodNumber) && currentPeriodFixedPrincipalAmount != null) {
-            this.adjustPrincipalForFlatLoans = this.adjustPrincipalForFlatLoans.plus(principalPerPeriod.minus(
-                    currentPeriodFixedPrincipalAmount).dividedBy(this.actualNumberOfRepayments - periodNumber, mc.getRoundingMode()));
-            principalPerPeriod = this.principal.zero().plus(currentPeriodFixedPrincipalAmount);
+        Money principalPerPeriod = null;
+        if (getFixedEmiAmount() == null) {
+        	principalPerPeriod = this.principal.minus(totalPrincipalAccounted).dividedBy(totalRepaymentsWithCapitalPayment, mc.getRoundingMode()).plus(
+                    this.adjustPrincipalForFlatLoans);
+        	if (isPrincipalGraceApplicableForThisPeriod(periodNumber)) {
+                principalPerPeriod = principalPerPeriod.zero();
+            }
+            if (!isPrincipalGraceApplicableForThisPeriod(periodNumber) && currentPeriodFixedPrincipalAmount != null) {
+                this.adjustPrincipalForFlatLoans = this.adjustPrincipalForFlatLoans.plus(principalPerPeriod.minus(
+                        currentPeriodFixedPrincipalAmount).dividedBy(this.actualNumberOfRepayments - periodNumber, mc.getRoundingMode()));
+                principalPerPeriod = this.principal.zero().plus(currentPeriodFixedPrincipalAmount);
 
+            }
+        }else{
+        	principalPerPeriod =  Money.of(this.getCurrency(), getFixedEmiAmount()).minus(interestForThisInstallment);
+        	return principalPerPeriod;
         }
+        
         return principalPerPeriod;
     }