How to calculate Daily Simple Interest

Amount of balance x interest rate, divide by 365 then x days between each payment. This will give interest amount you pay....the rest of the payment goes toward principle.

lets say you have a loan for $32,000 at 6.5% interest. 32,000 x .065= 208.00 divdided by 365 (days in a year) =$56.84 daily interest. Multiply $56.84 for each day between each payment to get the interest amount of your payment and the rest of the payment goes toward the principle balance. $56.84 x 30 days = $170.52 You make a payment of $300.00 and it will show $32,000 - $170.52 (interest) $129.48 (principle) paid. Bringing the balance owed $31,870.52

I have a outstanding loan of $100,440.00 and the bank modified my loan to .50% for the term of the loan 322 payments with daily simply interest.

is the a good deal or is there a catch somewhere? No prepay penalty.

ro you are talking about one-half of one per cent? is that a real number you cited? and it remains for the remaining term of your loan (27 years?). even if it's daily simple interest and you exceed the normal amount of days periodically (30), the savings will be astronomical compared to ordinary rates.

I owe $24000.00. I make a monthly payment of $618.57. My interest payment is at 8.9%. How do I figure my monthly interest on this loan ?

it will be 24000 * 8.9 / 1200. it comes out to be $178.

note that it will reduce month after month as apart from monthly interest payment your are paying towards principal reduction as well.

that response doesn't look clear enough to me. so, yrrep1234, here's my take on it:

loan amount times interest rate divided by 12 = one month's interest. i trust that is helpful.

ok my bank gave me a line of credit for 147600 for 30yrs at 6.675 so it originated on 1-1-08 with first payment due on 2/12/08 so I started making the payment i month early on 1-12-08 and when I check on line with the bank it allows me about 368.00 of principle and 631.00 of intrest.

so they do not have a amoritazation schedule on this simple int loan and I am trying to understand how they calculate the daily. They did tell me that the intrest is calculated in each month twice in two periods. I notice if I am sometimes a few days early or late the principle amount credited changes dramatically and it I make a Principle only payment and a early payment I only get credit a intrest reduction on the principle prepayment and the mortguage payment is shown at full intrest no principle reduction
point trying to use an early payment system to shorten the amount owned with out using cash to prepay the principle
thank you

i'm sorry, guest, but your post didn't quite get your point across. i couldn't understand exactly what's taking place, other than that you feel you're not making inroads into your principal balance as you thought you'd be able to do.

How and what do I charge for daily interest on a $1500. loan at 8% interest

Hi anony,

You're charging an interest rate of 8% per annum on the loan, right? I'm not sure how you'd charge a daily interest rate when you're already charging an interest rate on a yearly basis. However, if there has already been a loan agreement in place between you and your borrower, I don't think you can change the terms of the agreement and start charging interest on a daily basis, rather than on a yearly basis.

no matter...on an annual interest rate of 8%, there will still be interest earned/charged on a daily basis. if you simply take your loan amount of $1500 X 8%, which equals $120 and divide that by 365 days of the year, you'll find that the interest on a daily basis would be .329 (33 cents). as the balance goes down, of course, that number would decline accordingly.

the easiest way to do your calculations, anony, is to do them on a monthly basis: given $120 annual as the initial calculation, your first month's interest would be $10.

now keep in mind that subsequent months must be done individually, so depending on the new remaining balance (how much is still owed) after the first payment, you'd again multiply by 8% and divide by 12 to come up with a monthly figure.
i hope this isn't too convoluted.

I have an account which went into collection in march 2006. I contacted the company to set up a paymetn arrangement (after their refusal in prior years) in October 2009. I have paid, as agreed, monthly since then. However, I am being charged 9% interest DAILY. Is this action legal under the new credit card laws? The company entered a judgement against me in March 2007.

Hi shafrika,

There are different usury laws applicable in the various states. As per these laws, the lenders are allowed to charge you interest rates only up to a certain limit. If they charge you beyond that, they will be in violation of the laws. Which state are you in? Check out the usury limit as applicable in your state.

You can also negotiate with the collection agency to lower the interest rate. They might not want to do that initially. But through repeated negotiations, you can lower the rate. The collection agencies want to collect whatever money they get from you. They are likely to reduce the rate to make sure that you do not stop paying them.

I need to know how to properly calculate the daily interest rate on 14,000 at 14.8%. I am making a purchase that I intend to pay off in 90 days and I am doing a cash advance on a credit card at this crazy rate
Thanks