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Figured out my HELOC interest calculation was off by $200 a month
I've been paying on a home equity line of credit for about 8 months now, and I always just trusted the online portal's numbers. Last week I sat down with a calculator and the actual loan docs because something felt off - my payments weren't making a dent in the principal. Turns out the bank was calculating interest using a daily balance method but my payment was applying on a monthly cycle, so I was losing like $200 in extra interest every month. I called them to complain and they admitted the system auto-applies payments based on the statement date, not the posting date. They refunded me almost $700 in overcharged interest after I pushed back. What I learned is you gotta read the fine print on how they figure out the daily average balance, not just the APR. Has anyone else caught their bank messing up payment application timing on a variable rate loan?
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ray3637d ago
Used to just check the APR and call it good, but now I'm gonna be that guy digging through every single line of the loan docs lol. This totally changes how I look at HELOCs from now on, no way I'm trusting the auto calculations again.
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oliviagrant6d ago
and @ray363 you're so right, i actually caught my credit union doing the same kind of thing on my car loan a few years ago. they were calculating my daily interest from the day i made the payment instead of the day they actually posted it, so i was racking up like an extra $50 a month in interest for like 6 months before i noticed. i only found out because i started tracking everything in a spreadsheet and the numbers didnt match up. the bank tried to brush it off as a system glitch but i pushed and got a partial refund too. honestly its crazy how easy it is for them to slip those little timing differences in there, like they're counting on you just trusting the portal numbers. i never fully trust the auto calculations anymore after that, and i always double check the daily balance method vs the payment application dates.
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kevin_harris786d ago
@ray363 It's good you're paying closer attention now, because banks sure don't make it easy. I had a similar issue with a credit card years ago and it took me months to figure out the timing trick they were pulling. Always worth double checking the fine print on those daily balance calculations.
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