Interest overcharged?

[omni]

I have a few loan accounts with NAB, one of which is $100k with a $0 balance in the offset account for the full Dec 2014 month. Let's assume interest rate I am on is 5%, what amount should I expect to pay for interest taken out of my savings account? I thought the amount should be very close to:
100000 x 0.05 / 365 * 31 = $424

Or more accurately for daily compounding:
100000 x [1+(0.05/365)]^31 - 100000 = 425.5

I was charged 450* instead today, which seems strange. The only explanation I have is I was charged for 33 days of interest, which will bring us close to 450, but why is it 33 days?

 

[Richard Feynman]

Give your lender a buzz. They'll probably be able to explain or rectify

Without out the actual numbers it's not so easy to try and work it out.

FYI, a while back I took out a loan and for reasons unknown to me, my first monthly repayment happened about 6 weeks in (which not only meant it was notably bigger, but it moved that interest repayment into a new financial year which was a minor bummer).

 

[omni]

Thanks Richard, will have a chat tomorrow

 

[Terry_w]

I have a few loan accounts with NAB, one of which is $100k with a $0 balance in the offset account for the full Dec 2014 month. Let's assume interest rate I am on is 5%, what amount should I expect to pay for interest taken out of my savings account? I thought the amount should be very close to:
100000 x 0.05 / 365 * 31 = $424

Or more accurately for daily compounding:
100000 x [1+(0.05/365)]^31 - 100000 = 425.5

I was charged 450* instead today, which seems strange. The only explanation I have is I was charged for 33 days of interest, which will bring us close to 450, but why is it 33 days?

Interest is generally compounded daily but added once per month

 

[Marty McDonald]

It could be that the interest was accrued to the first business day after the end of the month or something similar to taking it to 33 days??

 

[z611143]

5k per annum of interest /365 days

$13.7 per day x 30.4 days per month avg = ~416.70 per month by me.

 

[Terry_w]

5k per annum of interest /365 days

$13.7 per day x 30.4 days per month avg = ~416.70 per month by me.

Since interest is calculated daily and added monthly each monthly payment should be different depending on how much days in the month.

 

[Archer]

Nab charge interest on my loans on the last business day of the month. Therefore some periods are more than 31 days - check your account to see when the last charge was made.

 

[pinkboy]

Yes, as the original poster noted in the original post with their calculation.

Nevertheless, its still doesnt add up.

pinkboy

 

[Perp]

Seems right to me. Last business day of November was Fri 28 Nov. Last business day of December was Wed 31 Dec - 33 days later.

 

[z611143]

13.7 x 33 days would equal 452 so seems right.

 

[omni]

Thanks everyone. Will catch up with NAB to confirm it. 33 days interest does make sense (Nov interest was lower). However Aug-Oct didn't make sense so nice exercise to go through with the banker anyway.

Interesting that it is done to a business day rather than the full month considering computers don't need holidays

 

[lizzie]

Don't forget to include any admin fee (usually $10) which only shows up separately on your loan statement, not taken out separately ...