Posted on: 15th Feb, 2006 10:04am
Daily Simple Interest loan calculation involves a method by which the interest on a mortgage loan is calculated on a daily basis. The loan balance is reduced on the day when the payment is reduced rather than on the day when payment is due.
Under the Daily Simple Interest formulae, the daily interest rate is given by:
Daily Rate= Annual Rate/365
Amount of interest payable each month = Number of days since last payment * principal outstanding balance * Interest Rate factor
Let's take an example where outstanding principal balance is $10000. You've sent in a payment of $170 around 30 days after your previous month's payment. Let's say the interest rate is 8.5% (the interest rate factor is .00022585)
As per the above formulae,
Interest payable each month = 30 * 10000 * .00022585 = $67.7555
Daily Interest = Daily rate * loan balance
Under the Daily Simple Interest formulae, the daily interest rate is given by:
Daily Rate= Annual Rate/365
Amount of interest payable each month = Number of days since last payment * principal outstanding balance * Interest Rate factor
Let's take an example where outstanding principal balance is $10000. You've sent in a payment of $170 around 30 days after your previous month's payment. Let's say the interest rate is 8.5% (the interest rate factor is .00022585)
As per the above formulae,
Interest payable each month = 30 * 10000 * .00022585 = $67.7555
Daily Interest = Daily rate * loan balance
How are you billed for a daily loan that charges daily simple interest if the loan is tied into an index that changes daily. How would you know what your actual payment would be by the due date? In trying to pay the interest early (putting more to principal),.
Hi Guest,
The interest you annually pay on a principal of $14000 at a rate of 14.8%
= $14000*14.8/100
= $2072
This is the amount of interest you pay annually. Now, to find out the daily interest you need to divide it by 365 days.
The daily interest = $2072/ 365 = $5.67 or $6 (approx.)
However, the lower the principal amount goes, the lower the amount of interest you pay. Thus, if you pay off, say $1000 in principal, the interest will be calculated on the rest of the $(14000-1000) or $13000 and you will have to pay less amount of interest. This is why the more extra payments you make towards the principal, the lesser amount of interest you pay and the sooner you can repay the debt.
Thanks,
Jerry
The interest you annually pay on a principal of $14000 at a rate of 14.8%
= $14000*14.8/100
= $2072
This is the amount of interest you pay annually. Now, to find out the daily interest you need to divide it by 365 days.
The daily interest = $2072/ 365 = $5.67 or $6 (approx.)
However, the lower the principal amount goes, the lower the amount of interest you pay. Thus, if you pay off, say $1000 in principal, the interest will be calculated on the rest of the $(14000-1000) or $13000 and you will have to pay less amount of interest. This is why the more extra payments you make towards the principal, the lesser amount of interest you pay and the sooner you can repay the debt.
Thanks,
Jerry
jerry, your calculation is correct, but if you're talking about an ordinary loan type, in which principal is paid each month, the annual interest calculation isn't really relevant, other than to calculate the first month's interest portion. better to get an amortization schedule - available on the MortgageFit site, for one; but also available from lenders themselves and on other sites around the web.
i'm afraid there are those who'll take your math much too literally and think that they'll be paying that sum no matter what.
i'm gratified to see that you suggested accelerating the payment of principal, thereby allowing for an even greater saving of interest.
i'm afraid there are those who'll take your math much too literally and think that they'll be paying that sum no matter what.
i'm gratified to see that you suggested accelerating the payment of principal, thereby allowing for an even greater saving of interest.
I have a house leased to a tenant and in my lease agreement with her i charge 18 % interest (apr) on the rent which is 900.00 plus an 80.00 late fee once the lease pmt is gone past the five day grace period. The total amount of the lease is 10,800 for the year of which her monthly lease payment is 900.00 plus the 80.00 late fee. I need to know how much interest to add to the total late amount due which is 980.00 on a per day basis. I am sure there in a formula for this but i dont have a clue. My name is David, my email is "e.d.e.n@live.com" and my cell # is 318-542-3135. I am in desperate need of assistance because my tenant is late every month and i need to start taxing her to give her motivation to pay on time. I would really appreciate your help
[Email address deactivated as per forum rules. Thanks.]
[Email address deactivated as per forum rules. Thanks.]
I'm happy not to be your tenant, David. INTEREST????? Being paid on a lease? That's an outrage in my eyes.
Our second mortage balance is $69,000. We filed bankrupcy a year ago, but kept our house and so we still owe our second mortage. after several months of going back and forth with Chase we finally recieved a statement for this account our interest rate is 3.75 daily which seems to be very high we live in Ohio is that rate legal and what does that mount to per month?
Hey Pam... you need to speak to some of the other lenders of Ohio and check out what type of daily rates they would be charging. This would give you an idea whether or not the rates are legal.
Pam, what is the 3.75? Is it dollars, a percentage or what? If it's dollars, that means you're paying less than $120 per month in interest. If it's a percentage based on an interest rate, you need to determine that, of course; and if it's truly your interest rate (which would multiply out to 1350% on an annual basis) then you've found the one lender in the universe that's getting away with something diabolical. There's no way it's truly 3.75% per day.
loan term 7yrs-date of loan- aug 15 2005-paid $5125 in total july 20 2010. I have now a balance to pay of 4785 for my loan with an interest of 12.05% how much would the interest be on top of it if I want to pay it now.
Hi jboct!
Welcome to forums!
If you pay the loan now, you would be paying an interest rate of 12.05%. However, if you want to pre-pay the loan, then you might have to pay a pre-payment penalty if such a clause is mentioned in your loan documents.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
If you pay the loan now, you would be paying an interest rate of 12.05%. However, if you want to pre-pay the loan, then you might have to pay a pre-payment penalty if such a clause is mentioned in your loan documents.
Feel free to ask if you've further queries.
Sussane
please i am very poor please help me and please urgent my loan.
Hi chandrabhan,
You can contact the local lenders in order to get a loan. Moreover, getting a loan will also depend upon your credit score, debt to income ratio, financial stability, etc. If you meet these criteria of the lender, you'll qualify for a loan.
You can contact the local lenders in order to get a loan. Moreover, getting a loan will also depend upon your credit score, debt to income ratio, financial stability, etc. If you meet these criteria of the lender, you'll qualify for a loan.
we currently owe 9114.00 on a Simple Interest Loan w/ an interest rate of 18.45%. Our payments are $273.00 per month. how can I figure out how much more to pay each month in order to eliminate the interest payments? Thank you!
Eden, there's no way in which to "eliminate" the interest payments other than paying the entire balance of $9114 all at once. Even if you knock your loan balance down to $1000 quickly, you'll still pay 18.45% on that balance. Essentially, it appears that you'll be paying for another 4 years or so on the loan; you can reduce interest costs by more than half if you were to pay an extra $273 that went straight to the loan balance.
I lent my son money he was not paying me interest but now I want interest.
1) How do I determine the interest?
2) How do I calculate each month what he will pay me?
1) How do I determine the interest?
2) How do I calculate each month what he will pay me?
Pat, the first step in determining the interest rate would be to discuss this with your son. I hope you've done that already, because switching from a no-interest plan to a new plan that calls for interest payments will be a major switch to anyone who isn't prepared.
As for interest rate, you can charge whatever rate you wish, though you ought to do a little bit of research and find out what a personal loan would cost him if he went somewhere else (like a bank), and then you ought to show some familial love and charge him a bit less than that.
As for the calculation, you can use the calculators on this site (look for the amortization schedule) to help you figure out the interest.
For starters, though, if he owed you $1000 and you were charging 10% interest, you would simply multiply $1000 by 10%, which equals $100 and divide that by 12, which would mean the interest for that month is $8.33. You would then calculate the remainder of the payment to reduce the principal balance and do the same calculation from that point on, based on the new unpaid balance.
I know that's confusing - if you can get the calculator to work for you, so much the better because then all you'll have to do is read it from one month to the next...and be sure to give him a copy of whatever you do.
As for interest rate, you can charge whatever rate you wish, though you ought to do a little bit of research and find out what a personal loan would cost him if he went somewhere else (like a bank), and then you ought to show some familial love and charge him a bit less than that.
As for the calculation, you can use the calculators on this site (look for the amortization schedule) to help you figure out the interest.
For starters, though, if he owed you $1000 and you were charging 10% interest, you would simply multiply $1000 by 10%, which equals $100 and divide that by 12, which would mean the interest for that month is $8.33. You would then calculate the remainder of the payment to reduce the principal balance and do the same calculation from that point on, based on the new unpaid balance.
I know that's confusing - if you can get the calculator to work for you, so much the better because then all you'll have to do is read it from one month to the next...and be sure to give him a copy of whatever you do.