1. What is the Daily Loan Payment Calculator?

The Daily Loan Payment Calculator computes the fixed daily payment amount required to pay off a loan over a specified term, considering daily compounding interest.

2. How Does the Calculator Work?

The calculator uses the daily payment formula:

Where:

• \( P \) — Principal loan amount ($)
• \( r \) — Daily interest rate (annual rate ÷ 365)
• \( n \) — Loan term in days

Explanation: The formula calculates the fixed daily payment that covers both principal and interest, with payments applied first to interest and then to principal.

3. Importance of Daily Payment Calculation

Details: Understanding daily payments helps borrowers plan cash flow, compare loan options, and assess affordability of short-term financing.

4. Using the Calculator

Tips: Enter the loan amount in dollars, annual interest rate as a percentage, and loan term in days. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How does daily compounding affect payments?
A: Daily compounding means interest is calculated each day, resulting in slightly higher total interest compared to monthly compounding.

Q2: Can this be used for credit card payments?
A: Yes, if you want to calculate fixed daily payments to pay off a credit card balance in a specific timeframe.

Q3: What's the difference between daily and monthly payments?
A: Daily payments are smaller but more frequent, which can help reduce total interest paid over the loan term.

Q4: Are there loans that actually use daily payments?
A: Some short-term loans and lines of credit may use daily payment structures, especially for business financing.

Q5: How accurate is this calculator?
A: It provides precise calculations assuming fixed interest rates and consistent daily payments. Actual loans may have additional fees.