Simple Interest

Simple Interest

Understanding simple interest

What exactly does "simple interest" mean? It's a common question with a simple answer.

In short, simple interest accrues on a daily basis and is based on the remaining unpaid principal on the contract. Each payment you make will first pay down any accrued interest, then the rest will apply to the principal or other applicable fees.

Click the video for an illustration on how simple interest works or see our most frequently asked questions below.

Frequently Asked Questions

What is simple interest?

Simple interest is a method for calculating interest accrual. Interest accrues on a daily basis on the unpaid principal balance and the interest charge is always based on the principal balance. Interest on interest is not charged.

How does my payment activity affect my account?

What if I pay on time?

What if I make late payments?

What if I pay ahead or make extra payments?

What is "per diem"?