Daily versus monthly accrual
With daily accrual the yearly rate is divided by 365 (or 360) and applied to the balance each day. Monthly accrual applies one twelfth of the rate once a month.
The difference matters most when you settle mid-month or change payment date.
Worked example
£20,000 at 9% on a 365-day basis accrues £4.93 a day. Over 30 days the interest is £147.95.
A 360-day basis charges slightly more for the same rate, because the yearly rate is divided by a smaller number.
Check your agreement
The day basis and the accrual method are in the loan terms. Ask the lender if it is not clear.
A payoff quote accounts for daily interest up to the settlement date.
Inputs for the is auto loan interest calculated daily calculator
Loan balance
The amount owed that interest is charged on.
Yearly interest rate
The note rate from your loan contract.
Days in the year
365 or 360, as set out in the agreement.
From
The date interest starts building.
To
The date you want the interest up to.
CALCULATOR QUESTIONS
Is auto loan interest calculated daily questions
Do car loans charge interest daily?
Some do, especially for settlement. Many apply interest monthly.
How much is £20,000 at 9% per day?
About £4.93 a day, or £147.95 over 30 days.
Does 360 versus 365 matter?
Yes, a 360-day basis produces a slightly higher daily charge.
Why is my payoff higher than the balance?
Interest accrues between the statement date and the day the payoff arrives.