The interest rate factor is the daily rate on a loan. It is commonly used in mortgage transactions to calculate the interest you'll have to pay each month. Determining the interest rate factor for your upcoming or existing loan is a very quick process that you can complete by hand or by using a standard calculator.

#### Step 1

Determine the interest rate on the loan and then express it as a decimal point. So for instance, if your rate is 6.75 percent, express it as .0675.

#### Step 2

Divide the interest rate in decimal form by 365.25 days (the extra .25 represents a quarter day to account for leap years). The final figure is your interest rate factor. So in this case it is .0675 divided by 365.25, which equals 0.000184804928131.

#### Step 3

Multiply the interest rate factor by the balance to get the daily interest rate. If the balance is $250,000 the daily interest is $46.20 per day (0.000184804928131 times 250,000).

#### References

**MORE MUST-CLICKS:**

- How to Estimate Electrical Bills
- How do I Calculate Forex Rollover Rates?
- How to Calculate the Interest Rate for a Savings Account

- SEC Yield Vs. Yield to Maturity
- What Are Some Safe Fixed-Income Assets?
- How do I Calculate a Tax, Tag & Title in Florida?
- What Are the Potential Faults in Using the IRR as a Capital Budgeting Technique?
- How to Calculate the Purchase Price of a Treasury Bill
- How to Calculate Interest Rate Using Present & Future Value
- How do I Calculate APY From Interest Rate?