# How To Find Finance Charge

Calculating finance in different ways can be confusing to consumers, and it may be difficult to tell if you’re being charged in the most cost-effective way possible. However, learning How To Find Finance charges will help you make informed financial decisions about your current credit card and any future ones you may choose to apply for.

## How To Find The Best Finance Charge

After you’ve settled on a car loan, it’s important to find out how much interest you’ll pay over time. This is called your Finance Charge or finance rate. There are different ways to calculate finance, but one of the most common ways is using an average daily balance. While not every car lender uses an average daily balance as their default method for calculating charges, it can be a useful measure of your loan balance if you have a fluctuating balance each month. To find out EJMR Finance exactly how your lender calculates their average daily balance and finance, ask them most will happily give you some details about how they do business.

In any case, there are simple steps that anyone can take to calculate basic finance.  Calculating an average daily balance is easy, and you can use it to find out what your Finance Charge will be. By dividing your principal loan amount by 360 days in a year, you get your average daily balance.  say they want to figure out how much interest and fees someone owes for each day of 30 days then they divide that person’s monthly total by 30 days and multiply that number by the number of days that month has already passed.

## What Is The Average Daily Balance and How to Calculate it

The average daily balance is a calculation of your average account balance over a billing cycle. Say you purchase something for \$10 with your card on day one, then another item for \$20 on day two, and then pay off your balance in full at night. Over those three days, you had an average daily balance of \$10. The problem is that many credit cards How To Find Finance Charge, based on different methods of calculation; such as average daily balance and highest outstanding balance, to name just two. To avoid these confusing charges, it’s important to read your credit card statement carefully and know which type of charge is applied to each transaction.

The easiest way to find your Finance Charge is to review your credit card statement and make note of each transaction. Once you know which ones carry finance, you can calculate them by dividing their dollar value by your average daily balance over a billing cycle. For example, if you had \$100 in purchases over a three-day billing cycle and paid off \$25, you’d divide 100 by 3 for an average daily balance of 33.3, then add in 25 to get 58 as your total amount owed with interest. This should equal what’s shown on your credit card statement. Also, remember that different cards may use different methods of calculating their average daily balance.

## Understanding Interest Compounding

One easy way to Find Finance Charge is to use a personal finance calculator. These handy tools have calculators that allow you to enter a balance, length of the loan, and interest rate; they will give you an answer at either periodic or compound interest. A better alternative is to have a lender run your numbers so that you can see all of your information. The benefit of doing it yourself is, however, that it’s easy to change variables and double-check assumptions.  A common method for calculating charges is an average daily balance. Using an average daily balance method, you can find your financing charge by multiplying your beginning account balance by your chosen rate and dividing that number by 365 or 366. This gives you a Finance Charge per day, which is then multiplied by how many days are in your billing cycle to get to the total finance. A downside to using an average daily balance method is that it’s not always accurate as balances change throughout your billing cycle. For example, if you pay down some of your debt before any new charges are added, then there will be fewer days with higher balances than if you were just calculating finance on a single day each month.