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