paying off a loan daily

[JustaDreamer]

Hello,

Would there be much benefit or different in paying either $100 a day vs $3000 a month of a loan seeing the interest is calculated daily but added on monthly.

Thanks Matt

 

[Brady]

Hello,

Would there be much benefit or different in paying either $100 a day vs $3000 a month of a loan seeing the interest is calculated daily but added on monthly.

Thanks Matt

In theory...

But unless you're getting paid daily no.

Let's say you get paid $3000 on the 1st of the month, it would be more beneficial to put $3000 straight into the loan then put in $100 a day...


Really should just have an offset and problem solved

 

[Richard Feynman]

Pay* as much as you can, as often as you can, as soon as you can.

*Put in offset (if available)

 

[marg4000]

Hello,

Would there be much benefit or different in paying either $100 a day vs $3000 a month of a loan seeing the interest is calculated daily but added on monthly.

Thanks Matt

The big difference comes from changing from monthly to fortnightly, because there are 12 months in the year but 26 fortnights, which means you are making an extra payment each year by taking the monthly payment and dividing it by two to arrive at the figure for the fortnightly payment. According to Noel Whittaker who first publicised the advantage of fortnightly payments, once you break it down further to weekly or daily the extra benefit is minimal.
Marg

 

[Peter_Tersteeg]

In theory it works, if you're getting paid daily.

A better solution would be to put all your money into an offset account until you need it. This will have a more beneficial effect on the amount of interest you pay.

 

[Scott No Mates]

Spot on PT, by utilising the offset a/c you minimise the outstanding balance as soon as you get paid then allow it to creep up as you pay your monthly expenses.

 

[Rolf Latham]

Having all available funds in offset IS paying daily

ta
rolf

 

[Colin Rice]

Go interest only with a linked offset. Problem solved.

 

[Hobbit]

Not for IP, not worth it.

 

[The Fence]

Offset....

 

[alexlee]

The big difference comes from changing from monthly to fortnightly, because there are 12 months in the year but 26 fortnights, which means you are making an extra payment each year by taking the monthly payment and dividing it by two to arrive at the figure for the fortnightly payment. According to Noel Whittaker who first publicised the advantage of fortnightly payments, once you break it down further to weekly or daily the extra benefit is minimal.
Marg

Not relevant if you use IO, as should be the case for all deductible loans.