For loans such as overdraft or invoice financing where interest can be calculated using various methods, it is very important to know if the Financing Partner is offering it on a daily, weekly or monthly basis.
Take for example a 45-days invoice of $100,000 at 2% per month calculated accordingly in the following example :
|
Daily |
Weekly |
Monthly |
|
45 days x 0.06% x $100,000 = $102,700 |
45 days are considered as 7 weeks
7 weeks x 0.5% x $100,000 = $103,500 an extra $800 or close to 30% more than a daily interest loan |
45 days are considered as 2 months
2 months x 2% x $100,000 = $104,000 an extra $1,300 or 48% more than a daily interest loan |
To compare between 2 different loans easily, you can also use our calculator. On your dashboard, when quoting you, your Financing Partners are to indicate which method they are using, if they are not calculating it on a per annum (p.a) basis, so it is easy for you to compare and Find The Loan best suitable for you
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