# Construction Loan Interest Formula

1. ## Construction Loan Interest Formula

Hello!

I'm in the process of building a new home. I have built an Excel sheet that adds up each draw on my loan. I would like to put in a formula that calculates a daily interest based on amounts as they are drawn from the bank. I'm not paying any principal on the loan during the 9 month construction phase. The monthly rate is 6.9% Can someone help me with a formula that calculates interest as draws are taken on the loan?

Thanks,
EGavin  Register To Reply

2. ## Re: Construction Loan Interest Formula

Specifics will depend on how your spreadsheet is set up, but, in general you
want to calculate the average daily loan balance, then multiply by 6.9%/12 to
get the interest charge for that month.

You could have a spreadsheet which calculates the loan balance daily, in which
case you could multiply each daily balance by 6.9%/365 to get the interest
charged that day, then add them up for the month.

Or, if your spreadsheet changes only when you draw down funds, calculate
3.9%/365*NumberDays since last drawdown.

If you are paying the interest every month, fine. If not, add the interest at
the end of the month to the loan balance.

--
Regards,
Fred

"EGavin" <EGavin.214xr1_1136420112.2704@excelforum-nospam.com> wrote in message
news:EGavin.214xr1_1136420112.2704@excelforum-nospam.com...
>
> Hello!
>
> I'm in the process of building a new home. I have built an Excel sheet
> that adds up each draw on my loan. I would like to put in a formula
> that calculates a daily interest based on amounts as they are drawn
> from the bank. I'm not paying any principal on the loan during the 9
> month construction phase. The monthly rate is 6.9% Can someone help
> me with a formula that calculates interest as draws are taken on the
> loan?
>
> Thanks,
> EGavin
>
>
> --
> EGavin
> ------------------------------------------------------------------------
> EGavin's Profile:
> http://www.excelforum.com/member.php...o&userid=30127
>  Register To Reply