Interest changing

Chibiwi

Hi, so I have a loan at a stupid rate of interest (long story) but I’m currently seeing that whilst my monthly payments aren’t changing I am sometimes being charged more interest than the previous month?
I’ve checked and this has nothing to do with the amount of days in the month and my interest is APR so surely it should be going down as I pay more into it? 

Thanks 

jonesMUFCforever

No there are 'special' loans that special people take out that does this - nothing to worry about.

fwor

As jonesMUFCforever says (I think!), this is exactly what you should expect to see. The interest is calculated daily, so it will vary as the month lengths vary, but it will reflect the number of days in the last month, not the current month. Overall the amount of interest should slowly be going down, and the proportion of capital being repaid will go up.

And yes - although the amount of interest accrued will vary, the repayment won't - the amounts are calculated so that you pay the same amount each month - because that's what borrowers prefer.

So... as he says - nothing to worry about.

foxy-stoat

Some secured loans have a variable interest rate.  But if its an unsecured type with a stupid high interest then its everything to do with the number of days in the month and when your payment day is.

How much was the loan, interest rate, loan term and monthly payments?

You should have a key facts sheet which shows this along with the total amount you pay.

Seems there is a lot of people who ask questions that they already have the answers to if they read the agreements they sign.