365 360 Us Rule

US Rule loans do not permit interest being charged on interest. Calculate a US Rule loan or mortgage schedule with our online calculator and this tutorial.

Traditionally, there are two common methods used for calculating interest: (i) the 365/365 method (or Stated Rate Method) which utilizes a 365-day year; and (ii) the 360/365 method (or Bank Method) which utilizes a 360-day year and charges interest for the actual number of days the loan is outstanding.

The two popular methods are 365/365 (or actual/365) and 365/360 (or actual/360). The number in the denominator is the number of days the lender uses to represent one year to calculate the daily interest rate. So 365/365 assumes a year of 365 days and 365/360 assumes a year of 360 days.

Banks most commonly use the 365/360 calculation method for commercial loans to standardize the daily interest rates based on a 30-day month. 1 To calculate the interest payment under the 365/360 method, banks multiply the stated interest rate by 365, then divide by 360. However, due to the numerator and denominator not matching, the 365/360.

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