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Why would my monthly interest charge increase?

Rach273
Rach273 Posts: 83 Forumite
Ninth Anniversary 10 Posts
in Loans
I haven't had a loan before, but took one out in March with Halifax, at 5.9% APR. I have been making overpayments on top of my monthly DD. Last month my interest charge was £53.17, this month it was £53.25. I know it is only a few pence, but I thought the interest charges reduced each month as the capital balance of the loan reduced?

Thanks in advance!
"It’s all about balance, do you see? Balance is the trick. Keep the balance and—” She stopped. “You’ve ridden on a seesaw? One end goes up, one end goes down. But the bit in the middle, right in the middle, that stays where it is. Upness and downness go right through it. Don’t matter how high or low the ends go, it keeps the balance.”

Comments

  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    It's charged daily, so usually down to the number of days in the month.
  • Gaz83
    Gaz83 Posts: 4,047 Forumite
    1,000 Posts Combo Breaker
    Rach273 wrote: »
    I haven't had a loan before, but took one out in March with Halifax, at 5.9% APR. I have been making overpayments on top of my monthly DD. Last month my interest charge was £53.17, this month it was £53.25. I know it is only a few pence, but I thought the interest charges reduced each month as the capital balance of the loan reduced?

    Thanks in advance!
    There were 30 days in April and 31 in May.
    "Facism arrives as your friend. It will restore your honour, make you feel proud, protect your house, give you a job, clean up the neighbourhood, remind you of how great you once were, clear out the venal and the corrupt, remove anything you feel is unlike you... [it] doesn't walk in saying, "our programme means militias, mass imprisonments, transportations, war and persecution."
  • Rach273
    Rach273 Posts: 83 Forumite
    Ninth Anniversary 10 Posts
    Doh! What an imbecile, thank you both :)
    "It’s all about balance, do you see? Balance is the trick. Keep the balance and—” She stopped. “You’ve ridden on a seesaw? One end goes up, one end goes down. But the bit in the middle, right in the middle, that stays where it is. Upness and downness go right through it. Don’t matter how high or low the ends go, it keeps the balance.”
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    Rach273 wrote: »
    Doh! What an imbecile, thank you both :)

    no,
    it was a very sensible question as it is not obvious how they calculate the interest.
    I doubt that a majority of people know it's based on the number of days in their accounting period
  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper
    My loan interest goes up and down all the time. When the payment date is at a weekend it sometimes gets credited a few days later than the previous month so they charge slightly more interest, then the next month the interest is a lot lower.

    I guess at the end I will pay the estimated interest anyway.
  • HappyMJ
    HappyMJ Posts: 21,115 Forumite
    10,000 Posts Combo Breaker
    The first day of the month is usually the first business/banking day of the month so there could be anywhere between around 27 and 34 days in a month depending on when last month's first day was and the day prior would be the last day of the month.
    :footie:
    :p Regular savers earn 6% interest (HSBC, First Direct, M&S) :p Loans cost 2.9% per year (Nationwide) = FREE money. :p
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