Interest Rates: Everything you ever wanted to know Article Discussion



  • And1_2
    I am thinking of putting £1,000 in the Chelsea Building Soc. Rainy Day Savings (3rd Issue) which is paying 2% AER. This offers the choice of interest paid monthly or annually. I will probably withdraw most of it again quite soon - I'm just looking for somewhere other than my current account to keep it until I need it.

    Would it be better to take monthly interest if I'm not intending to keep most of it there for the full year, or does it not make any difference?


  • magiciansgirl
    evening again :) There's no need to respond to the long winded message above, I've just found the answer I was looking for. Just discovered something very interesting and highly illegal on my redemption statements from Blemain Finance. I'd love to warn/alert others at least to check there's out but I've got no idea where to post such info... any ideas??:confused:

    There are a lot of Blemain victims over at The Consumer Action Group if you want to post there.
  • IJW_2
    Hello, I'm confused.

    In the following paragraph from the flat rate section under interest rates, shouldn't the APR total be £900?

    If the three little letters A, P and R don't follow the rate of a personal or car loan… danger! APRs automatically mean the rate is charged on any outstanding debt. Borrow £5,000 over 5 years and by the last year you only pay interest on the amount remaining, say £1,000. At 6% APR the total interest is £800.

    Say you pay back a grand a year, so at the start of each year you have this amount the following amount and pay the following interest:
    Yr 1: £5k x 0.06 = £300
    Yr 2: £4k x 0.06 = £240
    Yr 3: £3k x 0.06 = £180
    Yr 4: £2k x 0.06 = £120
    Yr 5: £1k x 0.06 = £ 60
    which comes out at £900. Have I misunderstood the whole APR thing?

  • Keith601
    Keith601 Posts: 32 Forumite
    edited 1 April 2010 at 11:04AM
    Hi There

    I have noticed that some Banks will calculate/Pay interest either Monthly or Annualy.

    The annual interest paid on maturity.

    What would happen to the annual interest payment, if I ditched and switched after say 9/10 months.

    Would I lose it, wait for it, or would it be calculated and paid when I ditched and switched?


  • michellechick
    Twice now I have received interest charges from JJB and they seem extremely high. Please can someone let me know if they are right in charging me the following:-

    Statement dated 13.5.11 for £1,668.45 with payment due date 30.5.11

    I paid £1,100.00 on 24.5.11 and the balance of £570.00 on 4.6.11.

    They charged me £60.60 which is at 2.658% per month.

    When I queries with them they wrote to me stating "interest is calculated on an average daily balance. Each time you make a purchase or a payment it alters your balance. The balances from each day during the statement period are totalled and divided by the number of days in the statement period and the percentage interest is calculated on this figure."

    This seems to be a very unfair way of charging customers. Is this the norm?
  • kolodenko
    HELPPPP ok here we go, i have a personal loan i have with MBNA, and recently in feb this year the loan was passed to moorgate loan servicing, aka AOF 2 Sarl.. ok now i am at the end of the loan i owe according to my records 2 payments, i called to verify this and they are saying i owe £150 more !! so 3 paymets?/ i have the loan contract in front of me and its a fixed rate apr , with the loan breakdown over 60 months with intrest shown and total repayable, which is correct when i pay the last 2 payments? the lady on phone says they need to check with mbna about this, as im not allowed to talk to them as they now own the loan?? in my contract fixed rate loan, it says last payment may be slightly more ? i dont have ppi on it so how can they take an almost extra payment on a fixed rate loan??? HELP!
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