The method most commonly used by financial institutions to determine finance charges on consumer loans is the

Average daily balance method a common method to calculate finance charges.

Explanation:

One of the most common ways through which the financial institutions for example the credit card companies calculate the financial charges that are to be paid by their customers and clients is the average daily balance method of the credit ...

If this is the method used by your financial company also then you can reduce the financial charges that you have to pay by paying off the financial balance earlier than the billing cycle.