Ford Credit confuses me..I sent them a email asking why my intrest is going up instead of down and they sent me this.. Thank you for contacting Ford Credit. Your account is based on Simple Interest Financing. Simple Interest Financing is a method of allocating your monthly payment between finance charge and principal. This allocation takes into consideration the annual percentage rate in your contract, the current unpaid balance of your contract, and the number of days in between the actual date your payment is received by Ford Credit. Simply put, it means the finance charge you pay is based on the principal balance outstanding for the actual number of days that is outstanding. Therefore, if you pay earlier than the scheduled payment date, you are assessed less finance charge and a greater percentage of your payment is used to reduce the principal balance. If you pay more than the scheduled payment amount, the added amount goes toward reducing the principal balance which will reduce future finance charges. Additional funds will be reflected as a reduction in the next scheduled payment amount and the invoice and on-line account access display the payment amount due as such. Conversely, if you pay late, more finance charges are earned and a lesser percentage of your payment is used to reduce the principal balance. Let's assume the unpaid balance on your account is $10,000, your Annual Percentage Rate is 12% and your scheduled payment is $300. Your daily finance charge would be calculated as follows: $10,000 X 12%/365 days per year = $3.287 per day If we processed your $300 payment exactly 30 days from the date we received your last payment, your finance charge for that period would be $98.61 ($3.287 X 30 days). Accordingly, your $300 payment would be divided between principal and finance charge as follows: Principal - $201.39 Finance Charge - $98.61 Total - $300 My balance is now $7,500.00 @ a rate of 16.90%..My due date is on the 20th of each month.My last payment of $294.82 they used $130.00 toward intrest? Each month it keeps going up. Any Help? What is the best way to pay down this debt besides send extra $ ??
Based on the figures you provided, your interest should be approx. $3.47 per day. This is based on a 30 day period. Simple interest loans fluctuate based on how early or late a payment is received and applied to your account. If you have ever been late, even a day, the interest is slightly higher. Paying just a few extra bucks a month should help reduce your overall interest. My suggestion is to call Ford Credit and have them send you an Amortization Schedule. This will show you how they have applied past payments and how they will apply future payments to principal and interest. Greg
08/07/02 CUSTOMER PAYMENT $294.82 08/07/02 AMOUNT TO INTEREST +$124.29 $7499.25 07/03/02 CUSTOMER PAYMENT $294.82 07/03/02 AMOUNT TO INTEREST +$119.86 $7669.78 05/31/02 CUSTOMER PAYMENT $294.82 05/31/02 AMOUNT TO INTEREST +$67.27 $7844.74 05/11/02 CUSTOMER PAYMENT $294.82 05/11/02 AMOUNT TO INTEREST +$88.16 $8072.29 04/26/02 OPENING BALANCE $10613.52 $8278.95
It seems to me the interest keeps going up because the days between payments are increasing. From your payment on 5-31 to 7-3, you accrued 33 days of interest. Between 7-3 and 8-7, you accrued 35 days of interest. The interest calculations I came up with are only pennies different that what you provided. Greg
I see now..If i make a payment on Sptember 15th My intrest would be from Aug 8th Till September 20th which is 39 days..So really if you pay it a couple weeks before the due date one week and then around the due date the next month it equals out and u still end up paying.
Thank you for contacting Ford Credit. I regret we are unable to provide an accurate amortization schedule for the account referenced as the financing method used is based on Simple Interest Financing. However, a statement of the account, which provides a complete breakdown of the amount allocated to finance charges from each payment, will be mailed to your home address. Please allow 7-10 business days for delivery. Please contact us if you have further questions regarding your account once this information is reviewed. Thank you for visiting Ford Credit on-line.
Bill B, I think that is a load of BS! Granted, the finance charges fluctuate based on the factors I mentioned before, therefore your final payoff amount may be higher or lower than what is stated on your Truth-In-Lending Disclosure form. However, they can still show what has been done so far; then project future payments based on you payment schedule (usually calculated as if payment is due and received on the 30th day). Anyone can make a simple interest Amortization Schedule projecting future balances and interest payments. I cannot understand why they canâ??t do it! Greg
I don't know But thankyou for your input..I will just send them an extra $50 each month.That ought to save me something.I dont want to pay it off to quickly because this is my first installment debt.
