Dealer Services
Dealer Services

How do I calculate interest on an auto loan?

With a simple interest loan, interest accrues daily. As you pay off the principal balance, the daily interest charge will decrease.

To calculate the daily interest charge, first convert the interest rate percentage into a decimal by dividing the interest rate by 100. Multiple that number by your principal balance, and then divide by the number of days in a year (365 or 366 for a leap year). This will give you the daily interest charge.

Example
If the loan has a 9% interest rate and a $10,000 principal balance, you convert the interest rate into a decimal: 9 / 100 = .09, and calculate the daily interest charge: .09 x $10,000 / 365 = $2.46 daily interest

With a simple interest loan, interest accrues daily. As you pay off the principal balance, the daily interest charge will decrease.

To calculate the daily interest charge, first convert the interest rate percentage into a decimal by dividing the interest rate by 100. Multiple that number by your principal balance, and then divide by the number of days in a year (365 or 366 for a leap year). This will give you the daily interest charge.

Example
If the loan has a 9% interest rate and a $10,000 principal balance, you convert the interest rate into a decimal: 9 / 100 = .09, and calculate the daily interest charge: .09 x $10,000 / 365 = $2.46 daily interest

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