Per diem, in the context of a car loan, refers to the daily interest that accrues on the loan. It represents the cost of borrowing money for each day that the loan remains unpaid.
When you make a payment on a car loan, part of it goes towards paying off the principal amount (the original amount borrowed), and the rest goes towards paying off the interest accrued up to that point. Since interest accrues daily on most car loans, the per diem amount can vary depending on the outstanding principal balance and the interest rate.
Understanding the per diem on a car loan can be helpful for borrowers to estimate the interest cost over time and to make informed decisions about loan repayment strategies