Monthly instalment amount is combined of principal and interest/handling fee payable. Under the “Rule of 78”, the proportion of interest/handling fee will be more in earlier instalments comparing to the later ones. Below is an example to demonstrate the calculation of interest/handling fee under “Rule of 78”. Please note that the bank may at its discretion apportion the monthly repayments between payment of interest and repayment of principal.

For example, if a Card Statement Instalment Program is to be repaid over 12 instalments, the total interest/handling fee will be divided into 78 portions (12 + 11 + 10 + … + 1 = 78). 12/78ths of the total interest/handling fee is allocated as the first instalment’s portion of the interest/handling fee payable, 11/78ths of the total interest/handling fee is allocated as the second instalment’s portion and so on until the twelfth instalment, at which 1/78th of the total interest/handling fee is allocated as that instalment’s portion of the interest/handling fee payable.