What is the difference between Monthly Rest and Daily Rest?

Financial institutions may charge you interest either on daily rests or monthly rests depending upon the products offered.

In the case of daily rests, the loan interest is calculated on a daily basis, while in the case of monthly rests, interest is calculated once a month based on the previous month's balance.

Under both types of loan, the principal sum immediately reduces every time a loan instalment is made.

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Reprinted with permission from BankingInfo (A Consumer Education Programme by Bank Negara Malaysia)

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Knowledge Base ID :   1270
Last Reviewed :   May 22, 2014
Source :   BankingInfo
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