Enter the loan balance and the yearly interest rate into the calculator to determine the per diem amount and per diem interest.
Auto Loan Per Diem Formula
The following formula is used to calculate the per diem on an auto loan.
PDI = I / 360
PDP = (I / 360) / 100 * B
- Where PDI is the per diem interest rate (%)
- PDP is the per diem interest payment amount ($)
- I is the yearly interest rate (%)
- B is the auto loan balance ($)
Auto Loan Per Diem Definition
What is a per diem auto loan?
A per diem auto loan is a loan structured so that the interest payments are calculated on a per diem basis. With per diem meaning daily in this case.
This is a term often used to describe the daily amount someone would theoretically pay on an auto loan interest if that loan happened to require daily payments. (This is almost never the case).
How to calculate a per diem auto loan?
First, determine the yearly interest rate. In this example problem, the yearly interest rate is found the be 8%.
Next, calculate the per diem interest by dividing the yearly interest rate by 360. So,
8% / 360 = .02222%
Next, determine the balance owed, or the original balance of the auto loan. In this example, the auto loan was taken out for a total of $12,000.00.
Finally, calculate the per diem payment amount using the formula above along with the per diem interest already calculated.
PDP = I / 360 * B
PDP = .02222/100 * 12,000
PDP = $2.644