For instance there are 12 monthly periods in a year. Some systems may charge based on actual days. When comparing mortgage loans be sure to exclude any escrow or insurance payments from the loan payment. Escrow payments do not effect the loan balance. This is a common problem.
Many institutions charge interest from date of payment to date of payment.
This is probably the fairest method to consumers but makes calculating an amortization schedule virtually impossible. With this system you have varying interest charges based on the number of days since you last made a payment. You will seldom make the payment on the same date each month and wide variations are common. The amortization schedule in Banker's Friend assumes payments are made exactly on schedule in equal intervals. The schedule should be only used as a guide when compared to actual contracts.