The whole story, as text
What is per-diem interest on a payoff quote?
Per diem: the interest your loan adds each day. On $17,289 at 18% it is $8.53 a day. A payoff quote is good through a date; after that, the per diem is added for every day until the money lands. Your payment arrives ten days after the quote's date. How much does the per diem add?
The answer
$85. Thirty days late would add $256, a little more than a month's scheduled interest, because the daily method does not shrink the way a payment would.
Why
Balance × rate ÷ 365. $17,289 × 18% ÷ 365 = $8.53 a day. Multiply by the days, add it to the payoff. Check your quote: Multiply the per diem on the letter by the number of days until your money lands, and add it to the payoff amount. If it does not match the letter, ask whether the lender uses a 360-day year.
One move
Send the money before the good-through date. On the date: $17,289 payoff, $0 interest added. Ten days late: $17,374 payoff, $85 interest added. Ten days: $85. Thirty days: $256. Some lenders use a 360-day year, which makes the per diem slightly higher. The letter's figure is the one that counts.
Per diem matters most on a refinance, where the new lender pays off the old loan and the timing is out of your hands.
Yours
Does refinancing help? runs these numbers for any loan. Nothing you enter leaves your browser.
The longer read
“Per diem” is Latin for “per day”. On a payoff quote it is the interest that accrues each day after the quote’s good-through date. Lenders give it so you can adjust the payoff yourself if the money lands a few days late, without asking for a new letter.
How it is calculated
Per diem is the balance times the yearly rate, divided by the days in the year. Most lenders use 365; some use 360, which makes the daily figure slightly higher.
On a balance of $17,289.14 at 18%:
- $17,289.14 × 18% = $3,112.05 a year
- ÷ 365 = $8.53 a day
Ten days late adds $85.26. Thirty days adds $255.78. A whole month’s per diem, then, is a little above a month’s scheduled interest on a simple-interest loan, because the daily method does not shrink as a payment would.
Where it matters
- Refinancing. The new lender pays off the old loan; per diem covers the days between the quote and the transfer. A small shortfall can leave a few dollars owing on the old loan, so ask for confirmation it is closed.
- Selling a car or house. The closing date rarely matches the quote date.
- Checking a quote. Multiply the per diem by the days since your last payment; the result should be close to the accrued interest on the letter.
Questions to ask your lender
- Is the per diem based on a 365-day or a 360-day year?
- What happens if my payoff arrives early: is the overpayment refunded automatically?
- Does the per diem change if a scheduled payment posts in the meantime?
See it with your own numbers
The glossary has the definition. To weigh a refinance, enter the payoff amount from your letter as “balance today” in Does refinancing help?.
Related: How do I read a loan payoff letter?. Glossary: payoff amount.
Educational tool, not advice. The payoff letter is the authoritative figure.
Written and reviewed by Riverbend Crossroads Digital LLC, Sunday, September 6, 2026. Figures from the Show Real Cost engine, computed exactly and shown to the cent. Educational, not advice; your lender's disclosures are the authoritative figures. How we calculate · Corrections.