Interest is accrued daily on the outstanding balance for that day, which is multiplied by the current interest rate divided by 365. Ready for this?
Example: A $10,000.00 balance with a interest rate of 3.25% will result in a daily interest accrual of $0.89: 10,000.00 X .0325 / 365 = 0.89.
There are lots of "rates" involved. This one reads a little like an SAT problem, but we're showing our work:
- An Andigo home equity line of credit features a variable interest rate based on the Prime Rate plus or minus a margin based on credit criteria, loan limit and combined loan to value ratio.
- The Prime Rate is published in the Wall Street Journal and is reviewed 45 days in advance of the quarterly rate change date.
- The minimum home equity line of credit interest rate is 3.25%, while the maximum rate is 18%.
Read all about rate information, if you so fancy.