About the Daily Interest Calculator
This daily interest calculator works out how much interest a loan balance accrues per day — the per diem — and the total interest between two dates. It is what you need for a mortgage or auto loan payoff quote, prepaid interest at a mortgage closing, a short-term business or bridge loan, a private loan between family members, or interest owed on a late invoice.
Choose the day-count convention your lender uses. Actual/365 divides the annual rate by 365 and is standard for most US consumer loans and federal student loans. Actual/360 divides by 360, which slightly increases the interest and is common on commercial loans and some mortgages. Actual/actual uses 366 days in leap years. You can also switch on daily compounding, used by some credit lines and savings products.
Days are counted from the start date up to but not including the end date, which is how a payoff statement counts interest “through” a date. The balance is assumed to stay the same over the period — if payments are made in between, split the period at each payment.
With the default inputs, the daily interest (per diem) is $44.52. Change any value above to recalculate instantly.
How to use the daily interest calculator
- 1Enter the outstanding loan balance and the annual interest rate.
- 2Pick the start date (last payment or funding date) and the end date (payoff or closing date).
- 3Choose the day-count basis stated in your loan agreement.
- 4Turn on daily compounding only if your loan compounds daily.
- 5Read the per diem and total interest; add it to the balance for a payoff estimate.
Formula and method
The per-diem (daily) interest is the balance P times the annual rate R divided by the day-count basis B — 365 or 360, or the actual number of days in the year (365 or 366) for actual/actual. Total simple interest is the per diem multiplied by the number of days d between the two dates, counting the start date but not the end date.
With actual/actual, days in a leap year use 366 and other days use 365, so a period that crosses New Year is split by calendar year. With daily compounding, each day’s interest is added to the balance, so interest = P × ((1 + R/B)^d − 1).
- P
- Outstanding balance
- R
- Annual interest rate (decimal)
- B
- Day-count basis: 365, 360 or actual days in the year
- d
- Number of days between the dates
Worked examples
$250,000 at 6.5%, Jan 1 to Mar 15 2026 (actual/365)
$250,000 × 6.5% ÷ 365 = $44.52 a day. From January 1 to March 15 is 73 days, so interest is $44.52 × 73 ≈ $3,250.
Commercial loan on actual/360
On actual/360, $1,000,000 × 8% ÷ 360 = $222.22 per day. April has 30 days, so the month’s interest is about $6,667 — slightly more than the $6,575 an actual/365 loan would charge.
Daily compounding over a full year
At 12% compounded daily for 365 days, $10,000 grows by about $1,274.75 — more than the $1,200 of simple interest because each day’s interest also earns interest.
Frequently asked questions
What is per diem interest?+
Per diem means “per day”. Per diem interest is the interest a loan accrues each day: balance × annual rate ÷ 365 (or 360). Lenders use it for payoff quotes and to charge prepaid interest from closing to the end of the month on a mortgage.
What is the difference between 360 and 365 day interest?+
Dividing the annual rate by 360 instead of 365 gives a slightly higher daily rate, so over a full year you pay about 1.4% more interest (365/360). Actual/360 is common for commercial loans; most US consumer loans use 365.
How do I calculate daily interest on a loan?+
Multiply the balance by the annual rate and divide by 365. For example, $20,000 at 7% accrues $20,000 × 0.07 ÷ 365 = $3.84 per day. Multiply by the number of days to get interest for a period.
Do mortgages charge daily interest?+
Most US mortgages charge interest monthly in arrears, but per diem interest is used at closing (prepaid interest to month-end) and in payoff statements. Some loans, like certain HELOCs and simple-interest auto loans, accrue interest daily throughout.
Does the day count include the end date?+
This calculator counts from the start date up to but not including the end date, the usual convention for payoff interest “through” a date. If your lender includes both dates, add one day to the end date.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.