Identify the loan principal balance
Find the annual interest rate
Convert the annual rate to a daily rate by dividing by 365
Multiply the daily rate by the current principal balance
Multiply that result by the number of days in the billing period
For monthly interest, use principal × annual rate ÷ 12 if the loan uses simple monthly accrual
For daily accrual loans, use principal × annual rate ÷ 365 × days
Subtract any payments made during the period if the loan recalculates interest after payments
Add unpaid interest to the balance if the loan capitalizes interest
Use the loan servicer’s statement to confirm whether interest is simple, daily, or capitalized
Repeat the calculation for each loan separately if you have multiple loans