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Are HSBC charging too much interest??
jimster999
Posts: 15 Forumite
Are HSBC miscalculating my interest rate?
Sorry if this is a bit technical, but I am a bit paranoid about these things!
I have a professional studies loan with HSBC. The balance is currently 10,000 exactly. The APR is fixed at 1% above the bank of england base rate, so currently 6.75%.
Four times a year (every three months) interest is added to the account. My latest interest charge came through this week and it is 210 pounds.
That applies for interest charges during the last three months, during which time the average outstanding balance was roughly 12,100. In other words the interest I've been charged for the last three months is 210/12,100 x 100 = 1.736% of the outstanding balance. Times that by four to get an approximate APR and we have: 6.9%. This doesn't allow for the fact that the interest will compound so this is an underestimate I think.
It seems therefore that I am actually paying more than 6.75% APR on my account. Is this likely to be a calculating error on my part? Or should I get in touch with HSBC?
In practice I will pay less actual money as interest because I'll hopefully have paid the whole loan off (or at least 80% of it) within six months - I'm spending most of my spare cash on this.
Sorry if this is a bit technical, but I am a bit paranoid about these things!
I have a professional studies loan with HSBC. The balance is currently 10,000 exactly. The APR is fixed at 1% above the bank of england base rate, so currently 6.75%.
Four times a year (every three months) interest is added to the account. My latest interest charge came through this week and it is 210 pounds.
That applies for interest charges during the last three months, during which time the average outstanding balance was roughly 12,100. In other words the interest I've been charged for the last three months is 210/12,100 x 100 = 1.736% of the outstanding balance. Times that by four to get an approximate APR and we have: 6.9%. This doesn't allow for the fact that the interest will compound so this is an underestimate I think.
It seems therefore that I am actually paying more than 6.75% APR on my account. Is this likely to be a calculating error on my part? Or should I get in touch with HSBC?
In practice I will pay less actual money as interest because I'll hopefully have paid the whole loan off (or at least 80% of it) within six months - I'm spending most of my spare cash on this.
Official DFW Nerd Club - Member no. 503
Debt: February 2006: -£26,773.76
May 2008: £0.00 Woooooo-oooo hoooooo!!:j
Nowsaving for house deposit:
March 2009: +£19,000 (approx)
Debt: February 2006: -£26,773.76
May 2008: £0.00 Woooooo-oooo hoooooo!!:j
Nowsaving for house deposit:
March 2009: +£19,000 (approx)
0
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