How do they calculate interest on my line of credit? I have made payments and they charged me the same interest 2 months in a row! They charge me the interest at the end of the month, is that when they take the calculation of interest or do they do it at the beginning of the month? I just dont understand how I can make payments and the same interest gets charged...
2007-11-09 04:30:56 · 3 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
If it is on a home equity line of credit and you are making just the interest only payment in is probably tied to the prime rate. Most of them are and it is based on the prime rate as it is published in th e"Wall Street Journal" on the first business day of the month. So your interest is based on your remaining principal balance. At some point you will have to pay it all off. Most are a max of 20 years and the last ten is where you have to pay back. Since it is a variable rate it works just like a credit card on your home and in many state can go as high as 20% over time if the prime increases.
2007-11-09 04:49:35 · answer #1 · answered by golferwhoworks 7 · 2⤊ 0⤋
The payment you made could be an interest only payment. Your balance did not decrease, so the payment for the next month is the same. You have to add more to the payment to decrease the balance of the loan.
2007-11-09 16:53:44 · answer #2 · answered by Steve R 6 · 0⤊ 0⤋
Did you pay anything of? If not, your interest payment will be the same every month, until interest changes.
2007-11-09 12:49:14 · answer #3 · answered by Anonymous · 1⤊ 1⤋