Equated Daily Installment Calculator
Loan Amount ($): Annual Interest Rate (%): Loan Term (Days): Calculate When managing short-term loans, especially microfinance or working capital loans, the traditional monthly EMI model may not suit all borrowers. For daily wage earners, freelancers, or small businesses, a more practical approach is to repay loans in Equated Daily Installments (EDI). The Equated Daily…
When managing short-term loans, especially microfinance or working capital loans, the traditional monthly EMI model may not suit all borrowers. For daily wage earners, freelancers, or small businesses, a more practical approach is to repay loans in Equated Daily Installments (EDI).
The Equated Daily Installment Calculator helps you determine the fixed daily payment required to repay a loan over a specific number of days, including interest. This article explains what EDI is, the formula behind it, how to use the calculator, and answers common questions.
Formula
The formula for calculating Equated Daily Installments is based on the annuity model, similar to EMI calculations but using daily intervals:
EDI = [P × r × (1 + r)^n] ÷ [(1 + r)^n − 1]
Where:
- P = Loan Amount
- r = Daily Interest Rate (Annual Rate ÷ 365 ÷ 100)
- n = Loan Term in Days
- EDI = Equated Daily Installment
This formula assumes interest compounds daily, which is common in daily repayment schedules.
How to Use the Equated Daily Installment Calculator
- Enter Loan Amount
Input the total loan principal (e.g., $1,000). - Enter Annual Interest Rate
Use the yearly interest rate (e.g., 12%). - Enter Loan Term in Days
Specify the total number of repayment days (e.g., 90 days). - Click “Calculate”
The calculator returns the fixed daily installment you’ll need to pay.
This tool is especially useful for micro-lenders, daily income borrowers, and financial institutions offering short-term credit.
Example Calculation
Suppose you take a loan of $900 at an annual interest rate of 18% to be paid over 60 days.
- Daily interest rate = 18 / 365 / 100 = 0.000493
- Loan amount (P) = 900
- n = 60
Using the formula:
EDI = [900 × 0.000493 × (1 + 0.000493)^60] ÷ [(1 + 0.000493)^60 − 1]
EDI ≈ $15.39
So, you will need to pay $15.39 every day for 60 days.
✅ FAQs
1. What is an Equated Daily Installment (EDI)?
EDI is a fixed daily payment made toward a loan, including both principal and interest.
2. Who uses EDI payments?
Small business owners, microfinance borrowers, daily wage earners, and short-term loan borrowers.
3. How is EDI different from EMI?
EDI is paid daily, whereas EMI (Equated Monthly Installment) is paid monthly.
4. Is the interest compounded daily?
Yes, the EDI formula assumes daily compounding of interest.
5. Can I use this for personal loans?
Yes, if the loan is structured for daily repayment.
6. What if I repay early?
Early repayment may reduce interest cost; check with your lender about prepayment terms.
7. What happens if I miss a daily installment?
Penalties or compounding arrears may apply depending on the lender’s policy.
8. Can I modify the term mid-loan?
Not usually, but some lenders may allow restructuring.
9. Is this useful for payday loans?
Yes, especially for calculating quick turnaround repayments.
10. What are the benefits of EDI?
Better cash flow management, smaller daily burden, and flexibility for daily earners.
11. Is EDI common in microfinance?
Yes. Many microfinance institutions prefer daily repayments to reduce risk.
12. Can I use this calculator for loans under 30 days?
Absolutely. Just enter the number of days accordingly.
13. What currencies does this work with?
Any currency—just ensure consistent inputs (e.g., all in USD, PKR, EUR, etc.)
14. How does interest rate affect EDI?
Higher interest increases the daily amount significantly over longer durations.
15. Can I use this calculator offline?
Yes. Just embed the HTML/JS into a local file or webpage.
16. Does this support variable interest rates?
No. It assumes a fixed rate over the loan period.
17. Can businesses use this calculator for cash flow forecasting?
Yes. Knowing daily liabilities helps plan operational expenses.
18. What if my interest is charged weekly?
This calculator is for daily compounding. For weekly interest, use a different formula.
19. Can I use this for mortgages?
Not typically, as mortgages follow monthly schedules and longer terms.
20. How accurate is the EDI calculation?
Highly accurate if the interest compounds daily and inputs are correct.
Conclusion
The Equated Daily Installment Calculator is a powerful tool for anyone dealing with short-term loans that require daily repayment. By knowing exactly how much you need to repay every day, you can better plan your budget, avoid late fees, and maintain financial discipline.
Whether you’re a borrower, lender, or financial planner, this calculator simplifies the process of estimating your repayment obligations. Bookmark it for easy access and use it whenever you’re considering a new short-term loan with daily installments.