![]() The above calculation uses a standard repayment plan and simple interest, which is a fixed rate and calculated based on the original amount borrowed (also known as the "principal"). Paying off your loans more quickly would reduce this amount over time. That's an estimated $1,569.84 in total interest for the year. In this scenario of an average public university student taking out a $30,030 loan with an annual federal interest rate of 5.30%, they would pay roughly $130.82 in interest alone each month. $4.36 (daily interest) x 30 days in billing cycle = $130.82 in monthly interest The third calculation would look like such: Step 3: Multiply your daily interest amount by the number of days in your billing cycle (we assume a 30-day cycle) to determine how much interest you're charged each month, or your monthly interest amount. The second calculation would look like such:Ġ.000145 (daily interest rate) x $30,030 (principal balance) = $4.36 in daily interest Step 2: Multiply your daily interest rate by your principal balance to determine how much interest you're charged each day, or your daily interest amount. Using the stats above, the first calculation would look like such:Ġ.053 (annual interest rate) / 365 days in a year = 0.000145, or 0.015% in daily interest Step 1: Divide your annual interest rate by 365 days to determine your daily interest rate, or the amount of interest that accrues on a daily basis. Investing +More All Investing Best IRA Accounts Best Roth IRA Accounts Best Investing Apps Best Free Stock Trading Platforms Best Robo-Advisors Index Funds Mutual Funds ETFs Bonds Help for Low Credit Scores +More All Help for Low Credit Scores Best Credit Cards for Bad Credit Best Personal Loans for Bad Credit Best Debt Consolidation Loans for Bad Credit Personal Loans if You Don't Have Credit Best Credit Cards for Building Credit Personal Loans for 580 Credit Score Lower Personal Loans for 670 Credit Score or Lower Best Mortgages for Bad Credit Best Hardship Loans How to Boost Your Credit Score Taxes +More All Taxes Filing For Free Best Tax Software Best Tax Software for Small Businesses Tax Refunds Tax Brackets Tax Tips Taxes By State Tax Payment Plans Personal Finance +More All Personal Finance Best Budgeting Apps Best Expense Tracker Apps Best Money Transfer Apps Best Resale Apps and Sites Buy Now Pay Later (BNPL) Apps Best Debt ReliefĬredit Monitoring +More All Credit Monitoring Best Credit Monitoring Services Best Identity Theft Protection How to Boost Your Credit Score Best Credit Repair Companies Best Mortgages for Average Credit Score.Best Loans to Refinance Credit Card Debt.
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