Deferred loan? Am i being overcharged?

ch3101

It's not front loaded.

I know the interest may be applied daily, but this is just for an example.

As with every loan, you pay interest on what you currently owe. So when you aren't paying anything the interest accrues on the balance. So you'll have found that in the first month of you having the loan, you paid the on they rate on 4400, that was then added to the balance.

Then the second month you paid the monthly rate on 4400 plus the extra added in the first month etc etc until now it is the 5900ish.


On another not, you've bought an appreciating asset, is is appreciating faster than the finance?
If it is, care to share what it is?

pvt

cleanslateguy wrote: »

Please.

Does 5900 sound correct>? Is there any way I can calculate this based on front loaded interest loans?

I posted a reply to this (#4) nearly a week ago confirming that it does "sound correct". So have others.

It is not a front loaded loan.

A quick rule of thumb for calculating it is to take the simple interest on 4400 for one year, which is 1320, and (to allow for compounding) add to that simple interest 50% of one year's interest on that interest figure, which is about 200. So after one year the amount owing would be about 5920.