What is simple daily interest?
The Majority of loans through Avant accrue interest using simple daily interest. Interest calculated using this method accrues daily on the loan's outstanding principal balance. At the beginning of your loan, a larger portion of your monthly installment payment will be applied toward interest since the outstanding principal amount is higher, meaning more interest will have accrued on it during the period between payments. As you make your monthly installments, the amount paid toward interest will decrease, as the outstanding principal amount, and the interest accrued on it, is reduced. Note that Avant customers are not charged interest on fees or accrued interest. Please refer to your contract to determine whether or not your loan accrues interest using this method.
Interest accruing on a daily basis example
On a loan with a principal of $19600, and an interest rate of 23.07%, $12.39 of interest will accrue, per day, during the first installment period. (Expressed as an equation: .2307/365 x $19,600 = $12.39)