(Newbie) Loan APR question

basehead

Hi chaps, to prevent me going to the bank and looking stupid I thought I'd ask the question here first (and look stupid anonymously).

I've got a Natwest graduate loan that I've been repaying at a steady monthly rate, interest deductions are taken every 3 months. The monthly repayments are always greater than the amount of interest added every 3. Every few months I pay in a random lump sum to pay off the loan a bit quicker in the long run.

Today when I checked the 4 months of statement available for the account I noticed the most recent interest deduction was greater than for the previous quarter. With my very basic knowledge of loans and repayments I would have expected the interest to decrease each quarter along with the total remaining on the loan..

Am I grossly mistaken in the way these things work or does this sound like a discontinuity? If any more info is required to help out, let me know!

Tixy

Usually if the balance was going down you would expect the payments to.
If its just a small amount higher then look at the dates of the payments, as interest will be calculated daily if you are comparing say interest for 90days with interest for 94 days then that can sometimes produce something that looks unusual, (eg if last quarter had Feb in then this could make the quarter than bit shorter).

If it doesn't appear to be that have they put your interest rate up? is the APR shown on the statement and has that changed at all?

basehead

The difference is only £4, but I'd predicted the interest to be about £10 less this quarter. I see what you mean about the difference in days but is the amount of interest really that sensitive to a few days here or there?

The APR isn't shown on the statement, the bank's website lists it at 9.4% which is the same or damn close to what it was when I took out the loan.

CLAPTON

you really hadn't given many facts to go on here but

lets say you owe 10,000 and are paying 9.4%

then that's 10,000 x 9.4% /365 per day interest = £2.56 per day so a few days can make a difference

basehead

I didn't know which details would be needed so rather that provide information overload with my first post I tried to keep it to a minimum.

I've just clicked that the previous quarter would have included January and the first banking day was on the 4th of the month. If that reduced the number of days in the quarter by 6 or so in total I guess that could have led to the increase I've seen.

I can't seem to access a statement that goes back far enough to give a full account of the loan history which makes working out where I should be all the more awkward. I'll keep a record of the state of everything at this point and reference it in another three months I reckon.

Cheers for your help!