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Interest question?

Posted by on Jul. 10, 2013 at 1:00 PM
  • 5 Replies

We have a debt that we owe of 16k with a 22% interest penalty. So we would be paying back 20k. Well it also has a 1.5% per month. So would that 1.5% of 20,000 every month added to the balance?

by on Jul. 10, 2013 at 1:00 PM
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Replies (1-5):
LancesMom
by Ruby Member on Jul. 11, 2013 at 9:37 AM

Is the 22% interest penalty, if you don't pay on time? Like if you have 2-3 late payments the penalty is a higher interest rate.

It sounds like the interest may be around 18% annually and the 22% interest is a penality. So the 1.5% would be the 18% divided by 12 months. They charged 1.5 % monthly on your bill.

But without actually seeing the contract, I couldn't tell ya the formula they are using.

You could probably call them and ask!


ScrChk23
by Amanda on Jul. 11, 2013 at 10:04 AM

 What she said.  :)

Quoting LancesMom:

Is the 22% interest penalty, if you don't pay on time? Like if you have 2-3 late payments the penalty is a higher interest rate.

It sounds like the interest may be around 18% annually and the 22% interest is a penality. So the 1.5% would be the 18% divided by 12 months. They charged 1.5 % monthly on your bill.

But without actually seeing the contract, I couldn't tell ya the formula they are using.

You could probably call them and ask!


 

Mother.May.I.
by Member on Jul. 11, 2013 at 11:38 AM


No the 22% interest is a penalty automatically added on. Long story. Found out that the 1.5% is added on to the balance monthly. So at the end of the year that is an extra 3600  that is on the balance. so on 16k we will eventually pay back 62k unless we find away to pay it off another way


Quoting LancesMom:

Is the 22% interest penalty, if you don't pay on time? Like if you have 2-3 late payments the penalty is a higher interest rate.

It sounds like the interest may be around 18% annually and the 22% interest is a penality. So the 1.5% would be the 18% divided by 12 months. They charged 1.5 % monthly on your bill.

But without actually seeing the contract, I couldn't tell ya the formula they are using.

You could probably call them and ask!




Reina13
by Gold Member on Jul. 13, 2013 at 10:40 AM

Wow that is an insane interest rate. If there anyway you refinance or apply for a lower interest rate without the penalty?



Enjoy a Coffee Break Chat with us Every Tuesday!

Mother.May.I.
by Member on Jul. 13, 2013 at 11:37 AM
We are looking into other options but our credit is shot. Looking at filing bankruptcy but we can't file on that so maybe chapter 7 so we only have to pay the principal.


Quoting Reina13:

Wow that is an insane interest rate. If there anyway you refinance or apply for a lower interest rate without the penalty?



Enjoy a Coffee Break Chat with us Every Tuesday!


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