Rule of 78 Calculator

Posted by Dinesh on

The Rule of 78 is a method used by some lenders to calculate interest charges on a loan. The Rule of 78 requires the borrower to pay a greater portion of interest in the earlier part of a loan cycle, which decreases the potential savings for the borrower in paying off their loan.

Rule of 78 Calculation


Refund = (U * (U + 1)) \ (T * (T + 1))*F

U = Unearned period
T = Total period
F = Finance charge