Enter a loan balance or principle, the total length of the loan, and the annual interest rate (%) to calculator the daily interest owed on the loan.
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Daily Interest Calculator Guide
The daily interest calculator helps you estimate how much interest accrues each day on a loan, credit balance, savings balance, or other principal amount. This is useful when you want to understand per-day borrowing cost, compare lenders, estimate payoff timing, or see how different day-count methods change the total interest charged.
Depending on the situation, daily interest can be calculated using a standard 365-day year, a 360-day year under Banker’s Rule, daily compounding, or an average daily balance method. Each approach is common in different financial contexts, so using the right method gives you a better estimate.
What this calculator can help you estimate
- Daily simple interest on a loan or balance
- Interest using a 360-day banking convention
- Future value with daily compounding
- Interest based on an average daily balance
- Per-day borrowing cost for loans, mortgages, and credit accounts
- How much interest builds up over a set number of days
Daily interest formulas
The most common daily interest formula is:
Where:
- Principal = current balance or amount owed
- Annual Rate = yearly interest rate written as a decimal or percentage
- 365 = days in a standard year
Example: if you owe $10,000 at 8% annual interest, the estimated daily simple interest is:
Banker’s Rule vs 365-day daily interest
Some lenders and financial calculations use a 360-day year instead of 365 days. This is often called Banker’s Rule. Because you divide by 360 instead of 365, the daily interest amount is slightly higher.
365-Day Method
Daily Interest = P × r ÷ 365
Banker’s Rule
Daily Interest = P × r ÷ 360
Using the same $10,000 balance at 8% annual interest:
- 365-day method: $2.19 per day
- 360-day method: $2.22 per day
That difference is small per day, but it becomes more noticeable over longer periods or larger balances.
Daily compounding formula
Daily compounding means interest is added to the balance each day, and future interest is then calculated on the growing amount. The standard formula is:
Where d is the number of days. This method is useful for savings, investments, and some credit products where interest compounds daily instead of being tracked as simple per-day interest.
Average daily balance method
The average daily balance method is often used for revolving balances such as credit cards. Instead of applying interest to one fixed balance, the issuer tracks the balance for each day of the billing cycle, averages those balances, and then applies the daily periodic rate.
The formula is:
This method gives a more realistic estimate when your balance changes during the month due to purchases or payments.
How to calculate daily interest step by step
- Enter the principal, loan balance, or average balance.
- Enter the annual interest rate as a percentage.
- Choose the correct method: 365-day, 360-day, daily compounding, or average daily balance.
- If needed, enter the number of days in the period.
- Calculate the interest owed, future value, or per-day interest amount.
Worked examples
Example 1: Daily simple interest
Balance: $5,000
Rate: 6%
$5,000 × 0.06 ÷ 365 = $0.82 per day
Example 2: 30 days of interest
Balance: $12,000
Rate: 9%
$12,000 × 0.09 × 30 ÷ 365 = $88.77
Example 3: Banker’s Rule
Balance: $12,000
Rate: 9%
$12,000 × 0.09 ÷ 360 = $3.00 per day
When daily interest matters most
- Paying off a loan early and estimating saved interest
- Checking mortgage or auto loan payoff amounts
- Estimating credit card interest between statement dates
- Comparing lenders that use different day-count methods
- Understanding how much a delayed payment costs per day
Common mistakes when estimating daily interest
- Using the annual rate as a whole number instead of a percentage
- Using 365 when the contract uses 360 days
- Forgetting that compounding and simple interest give different results
- Using the original loan amount instead of the current balance
- Ignoring balance changes when average daily balance should be used
Daily interest vs monthly payment
Daily interest is not the same as your scheduled monthly payment. A monthly payment may include principal repayment, interest, fees, escrow, or other charges. Daily interest only shows the interest portion accruing over time. That is why a loan can have a daily interest amount of a few dollars while the monthly payment is much higher.
