Auto Loan Per Diem Calculator

Managing an auto loan isn’t just about keeping up with monthly payments—it’s also about understanding how interest accumulates daily. This is known as per diem interest, and it plays a major role in determining your payoff amount, especially if you make an early or late payment, refinance your loan, or pay it off entirely.

Our Auto Loan Per Diem Calculator helps you estimate the daily interest charges on your car loan. By knowing exactly how much you’re paying each day, you can plan your payments more effectively, avoid surprises, and save money in the long run.

How the Auto Loan Per Diem Calculator Works

Interest on auto loans accrues daily based on your remaining loan balance and your annual percentage rate (APR). Lenders divide your APR into a daily rate and apply it to your principal balance.

The calculator works by taking three key inputs:

1. Outstanding Balance: The current amount you owe on your loan.
2. APR (Annual Percentage Rate): Your interest rate expressed as a yearly percentage.
3. Number of Days: The days between your payoff quote and the actual payment date (or the delay between payments).

From there, the calculator shows you:

• Daily Interest (Per Diem): The cost of your loan per day.
• Total Interest for Selected Days: The extra amount you’ll owe if your payment is delayed or rescheduled.
• Payoff Amount: The exact amount needed to close your loan, including per diem interest.

For example:

• Balance: $20,000
• APR: 7%
• Daily Interest = ($20,000 × 0.07 ÷ 365) ≈ $3.84/day
• If you delay your payoff by 15 days, you’ll owe an additional $57.60 in interest.

Why Per Diem Interest Matters

While per diem charges may seem small on a daily basis, they can significantly impact your payoff balance or cost you money if ignored. Here’s why it matters:

• Accurate Payoff Quotes: When you request a payoff, lenders calculate how much interest will accrue between the date of the quote and the date they expect your payment. If you pay later, you’ll owe more; if you pay earlier, you’ll owe less.
• Late Payments: Even if you’re only a few days behind, daily interest adds up quickly, increasing your total loan costs.
• Early Loan Payoff: Paying your loan off sooner reduces the number of days your balance accrues interest, saving you money overall.
• Refinancing: If you’re switching lenders, per diem interest helps determine your exact closing balance so you don’t overpay or underpay.
• Cash Flow Planning: Knowing how much you’re paying daily gives you greater control over your budget and financial decisions.

How to Use the Calculator

Using the Auto Loan Per Diem Calculator is simple, but it provides powerful insights:

1. Enter Your Loan Balance – Input your current payoff amount or the remaining principal.
2. Input the APR – This is your interest rate (not including any fees).
3. Choose the Timeframe – Enter the number of days you want to calculate for (e.g., the gap between your payoff quote date and your payment date).
4. Review the Results – The calculator will show both daily and total interest, along with an adjusted payoff amount.

Example:

• Loan balance: $15,000
• APR: 6%
• Daily interest = ($15,000 × 0.06 ÷ 365) ≈ $2.47/day
• If you make your payoff 10 days after your lender issues the quote, you’ll owe about $24.70 extra in interest.

This small daily amount highlights why timing matters so much when paying off or refinancing a loan.

Key Tips for Managing Per Diem Costs

Understanding per diem interest is only half the battle. The other half is using that knowledge to manage your loan effectively. Here are some practical tips:

• Pay Early When Possible: Even paying a few days ahead of schedule can cut interest costs.
• Request Updated Payoff Quotes: If you can’t pay on the date of the original payoff, ask for an updated figure to avoid underpayment.
• Make Extra Principal Payments: Extra payments reduce your balance, which lowers future per diem charges.
• Refinance at a Lower Rate: A reduced APR decreases your daily interest rate immediately.
• Avoid Skipping Payments: Delaying even one payment increases both per diem interest and the risk of late fees.
• Plan for Payoff Timing: If selling or trading in your car, align the payoff date closely with the transaction to avoid unnecessary per diem charges.

Frequently asked questions