Daily Rest Interest Calculator
How Daily Rest Interest Works
Interest is calculated daily based on your current loan balance. When you make a payment:
- Interest is charged for days before payment
- Principal is reduced by (Payment – Accrued Interest)
- New daily interest is calculated on the reduced balance
Tip: Paying earlier in the month reduces your interest!
Daily Rest Interest Calculator
Understanding Daily Rest Interest
When taking out a loan, the interest calculation method can significantly impact your total repayment amount. One of the most borrower-friendly methods is daily rest interest, which calculates interest based on your daily outstanding balance rather than the monthly balance.
What Is Daily Rest Interest?
Daily rest interest is a loan calculation method where:
- Interest is computed daily on your current principal balance
- Each payment immediately reduces your principal
- The next day’s interest is calculated on the new, lower balance
Key Benefits:
✅ Lower total interest – Pay less over the loan term
✅ Rewards early payments – Reduces interest faster
✅ More transparent – Directly see daily balance changes
Daily Rest vs Monthly Rest Interest
| Feature | Daily Rest Interest | Monthly Rest Interest |
|---|---|---|
| Calculation | Fixed for an entire month | Previous month’s balance |
| Interest Charged | Changes daily | Borrowers who pay on the due date |
| Early Payment Benefit | Significant savings | Minimal impact |
| Best For | Borrowers who pay early | Borrowers who pay on due date |
Example: On an RM500,000 loan at 5% interest:
- Daily Rest (paid on 15th): RM2,078.63 (1st month interest)
- Monthly Rest: RM2,083.33
- Savings: RM4.70 in just the first month
These small daily savings compound significantly over a 20-30-year loan!
How to Use Our Daily Rest Interest Calculator
Our free calculator helps you:
- Compare daily vs monthly interest costs
- Visualize how payment timing affects interest
- Plan early payment strategies
Calculator Inputs:
- Loan amount
- Interest rate
- Loan tenure
- Payment day of the month
- Days in year (360 or 365)
Instant Results:
- Monthly installment amount
- First month’s interest breakdown
- Principal reduction
- New loan balance
3 Ways to Maximize Daily Rest Savings
- Pay Early in the Month
- Even 5-10 days early makes a difference
- Example: Paying on the 1st vs 30th can save ~8% interest
- Make Extra Principal Payments
- Directly reduces the daily balance
- Consider biweekly payments instead of monthly
- Choose Shorter Loan Tenures
- Combining daily interest with a shorter term
- Can save 20-30% in total interest
FAQs
1. Is daily rest interest always better?
Yes, if you pay on time or early. Late payments accrue more interest under daily rest.
2. How much can I save with daily rest?
On an RM500K, 20-year loan:
- Paying on the 1st vs 30th: ~RM15,000 savings
- Making extra payments: Up to RM50,000 savings
3. Do all banks offer daily rest loans?
Most modern loans use daily rest, but always verify with your bank.
4. Can I switch from monthly to daily rest?
Typically requires refinancing to a new loan.
5. How is daily interest actually calculated?
Daily Interest = (Loan Balance x Annual Rate) ÷ Days in YearConclusion: Why Daily Rest Matters
Daily rest interest rewards financially disciplined borrowers. By:
- Paying early
- Making extra payments
- Understanding daily accruals
You can save tens of thousands over your loan term. Use our calculator to see exactly how much you could save!
