How much interest would i pay?

carl310166

If a borrowed say 10k at 0% for 9 months,then failed to pay it all off until the 10th month,how much interest would i pay?

I am under the impression i would pay interest from the start,so for the whole 9 months,but i don't know how much it would be.And would it make any difference how much i had paid off during the 9 months,even if i had only £1 left to pay at the end, would i have to pay all the interest?

Is there an easy way to work out these interest payments,especially if i went into the 11th month etc

I am just trying to work out a contingency plan,i am not stoozing,but using the 0% cards that i have to borrow at no cost,but if i can't get another card after that,i would like to know the cost if i don't pay ALL off in time.I have been doing this for about 15 months so far,using my Egg aniversary offer etc

Sorry if it sounds complicated,i can be more precise if needed.

Dave_the_Ginger_Cat

carl310166 wrote:

If a borrowed say 10k at 0% for 9 months,then failed to pay it all off until the 10th month,how much interest would i pay?

I am under the impression i would pay interest from the start,so for the whole 9 months,but i don't know how much it would be.And would it make any difference how much i had paid off during the 9 months,even if i had only £1 left to pay at the end, would i have to pay all the interest?

Is there an easy way to work out these interest payments,especially if i went into the 11th month etc

I am just trying to work out a contingency plan,i am not stoozing,but using the 0% cards that i have to borrow at no cost,but if i can't get another card after that,i would like to know the cost if i don't pay ALL off in time.I have been doing this for about 15 months so far,using my Egg aniversary offer etc

Sorry if it sounds complicated,i can be more precise if needed.

You would not pay interest on the interest free part of the time unless they have come up with a very strict condition set - this is more typical of a storecard or shop based deferred finance deal. Some cards however say that if you breach the T&C's mostly by going into arrears, then they will reinstate any preferential rate. MBNA do this to my knowledge.

The interest you will be charged will be from the day that the interest commences and will be on the balance on the day of the statement.

So say if your interest free period ends 01/01/07, your statement date is 15th Januuary, and you owe a grand on that date, you'll be charged £1000 X Monthly interest rate/2 as it was only half a month. This will then continue to accrue until this is repaid, but again at the balance on the statement date.

Be very careful not to use the card for cash withdrawals or other interest bearing transactions. Your payments will typically be applied to the lowest rate of interest first, and the account will behave quite oddly and charge unexpected interest if you do this.

Also do bear in mind that you'll need to pay the minimum payments during the 9 month period - typically 2% of the balance.

Good luck

Paul_Herring

You would pay interest on the balance left after 9 months from the date of the expiry of the 0% to the date that you cleared the balance. You wouldn't be paying interest from the start of the BT.

Assuming a 2% minimum payment, at the end of 9 months (8 payments) you'd be left with £8508.

10th month's interest at (assuming) 10% (0.80%/month) would work out at £60.06.

11th month would add the above interest, work out new interest and subtract monthly payment.

carl310166

Thanks both,it's a lot better than i thought.

I can pay large amounts off every month (over £1k),but as i stated,i wanted a contingency incase there was a slight balance left at the end.

grumbler

carl310166 wrote:

I can pay large amounts off every month (over £1k),but as i stated,i wanted a contingency incase there was a slight balance left at the end.

Don't make large monthly payments. Pay minimum payment by Direct Debit. Put the rest into into 5%+ instant access saving account and make the lump sum payment at the end. You will be about £200 better off ...

Paul_Herring

grumbler wrote:

carl310166 wrote:

I can pay large amounts off every month (over £1k),but as i stated,i wanted a contingency incase there was a slight balance left at the end.

Don't make large monthly payments. Pay minimum payment by Direct Debit. Put the rest into into 5%+ instant access saving account and make the lump sum payment at the end. You will be about £200 better off ...

Just to clarify - only do this within the 0% period. Withdraw what you've saved at the end of the 0% and pay off the card with what you've saved to minimise the interest charged after month 9.