Daily interest loan calculator
This daily interest loan calculator shows how much interest accrues each day on your balance, which explains why your payoff amount changes day by day.
Amortization schedule
| Year | Principal | Interest | Balance |
|---|---|---|---|
| 1 | $3,687.79 | $1,728.53 | $18,312.21 |
| 2 | $4,013.75 | $1,402.57 | $14,298.46 |
| 3 | $4,368.53 | $1,047.79 | $9,929.93 |
| 4 | $4,754.68 | $661.64 | $5,175.25 |
| 5 | $5,175.25 | $241.37 | $0.00 |
How daily interest is calculated
Many car, personal and student loans accrue interest daily: the daily interest equals the balance times the annual rate divided by 365 (or 360). Your payment first covers the interest that built up since the last payment, so a payment made later covers more days of interest and reduces less principal.
Why your payoff amount changes
The payoff figure on a given date is the principal plus the interest accrued to that date. That is why a payoff quote is good only until a certain date, and why paying a few days early or late changes the amount by a few dollars.
$22,000 at 8.5% by loan length
Borrowing $22,000 at 8.5% over 5 years costs $451.36 a month and $5,082 in interest, $27,082 in total. Shorter terms raise the payment but cut the interest, and longer terms do the reverse. The table shows the trade-off across common terms.
| Term | Monthly payment | Total interest | Total paid |
|---|---|---|---|
| 12-month | $1,918.84 | $1,026 | $23,026 |
| 2-year | $1,000.02 | $2,001 | $24,001 |
| 3-year | $694.49 | $3,001 | $25,001 |
| 4-year | $542.26 | $4,029 | $26,029 |
| 5-year | $451.36 | $5,082 | $27,082 |
| 7-year | $348.40 | $7,266 | $29,266 |
| 10-year | $272.77 | $10,732 | $32,732 |
How your rate changes the cost
Personal loan rates vary widely with credit score, from the mid single digits for strong borrowers to 30% or more for weak credit. On $22,000 over 5 years, moving from 8.5% to 11.5% adds $1,948 in interest.
| APR | Monthly payment | Total interest |
|---|---|---|
| 5.5% | $420.23 | $3,214 |
| 7% | $435.63 | $4,138 |
| 8.5% | $451.36 | $5,082 |
| 10% | $467.43 | $6,046 |
| 11.5% | $483.84 | $7,030 |
Interest per day at different balances
At 8.5% APR, a $22,000 balance accrues about $5.12 a day, or $155.83 in an average month. As you pay the balance down, the daily interest falls with it.
| Balance | Interest per day | Interest per 30 days |
|---|---|---|
| $22,000 | $5.12 | $153.70 |
| $16,500 | $3.84 | $115.27 |
| $11,000 | $2.56 | $76.85 |
| $5,500 | $1.28 | $38.42 |
| $2,200 | $0.51 | $15.37 |
How much can you borrow for a given payment?
Working backwards at 8.5% over 5 years, here is the loan size each monthly payment supports.
| Monthly payment | Loan amount |
|---|---|
| $200/month | $9,748 |
| $300/month | $14,622 |
| $400/month | $19,496 |
| $500/month | $24,371 |
When is half of a $22,000 loan repaid?
With a $451.36 payment, the balance falls below half ($11,000) after 34 payments, about 2.8 years into a 5 years loan. Because interest is highest at the start, the second half of the loan is paid down much faster than the first.
| After | Balance left | Paid so far |
|---|---|---|
| 1 year | $18,312 | $5,416 |
| 2 years | $14,298 | $10,833 |
| 3 years | $9,930 | $16,249 |
Frequently asked questions
How do I calculate daily interest on a loan?
Multiply the balance by the annual rate and divide by 365. For $10,000 at 8% that is about $2.19 a day.
Does paying early save interest?
On a daily simple-interest loan, a payment made earlier covers fewer days of interest, so slightly more goes to principal.
How is a loan payment calculated?
The payment is principal × r ÷ (1 − (1 + r)^−n), where r is the monthly rate (APR ÷ 12) and n is the number of months. Each payment covers that month’s interest first, and the rest reduces the balance.
What is the difference between interest rate and APR?
The interest rate is the cost of borrowing the money. APR also includes certain fees, so it is the better number for comparing offers. This calculator treats the rate you enter as the rate that accrues on the balance.
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Estimates from standard loan formulas, not a loan offer or financial advice. Example rates are assumptions: use your own quote.