How to Calculate Your Interest Rate on Any Loan or Credit Card

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How to EASILY CALCULATE YOUR INTEREST RATE on any loan or credit card, in just a few steps.

In this video, you'll learn how to calculate home loan interest rate, or how to calculate loan interest per month on any loan or credit card.

00:17 - STEP 1: Understand the Balance and Interest Charged
00:40 - STEP 2: Calculate the Daily Interest
00:55 - STEP 3: Annualize the Interest
01:09 - STEP 4: Divide by the Balance
01:15 - RECAP Step-by-Step

A lot of you have asked about how to calculate your interest rate. It used to be the law that lenders had to tell you on your statement how much your interest rate was, but hose regulations have been rolled back. But if you do a little bit of math, which I'll show you, it's pretty easy.

You can easily do the calculations yourself. Using just your balance information, interest charged, and the number of days in your billing period, you can find out your annual interest rate.

STEP 1: INTEREST CHARGED
On the last day of the billing period, you have an ending balance. This is the number that is used to charge you interest. Here's the number you want to look for Interest Charged [on the principal balance or purchases.]

STEP 2: Calculate DAILY INTEREST
Once you've found that number, let's say it's $160.19... Take that and divide by the number of days in the in the billing period. Yes, it matters how many days are in the billing period. (i.e. 28 days vs. 31 days.) That's our Daily Interest.

STEP 3: Calculate ANNUAL INTEREST
Multiply the daily interest times 365. We need this number because interest rates are always stated as an annual rate. (In this case, we get $1949.) That would be your Annualized Interest.

STEP 4: Divide the Annual Interest by the Current Balance to get the INTEREST RATE.
If our annualized interest is $1949 and our balance was $10,000, if we divide 1949/10,000 we get A 19.49% interest rate.

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