Most lenders calculate interest daily 🗓️
- This means you only pay interest for the time you have the loan.
- With many lenders, if you settle your loan after one month, you only pay interest for that one month.
- So, the sooner you settle, the more money you can potentially save.
- But you do need to check this out, as some lenders ‘frontload’ their interest, which means that all the interest is added at the start of the loan term, which means that if you pay the loan back early you won’t save money on interest.
Also, see If the loan has ‘daily interest’ how does this work?