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Interest on a Revolving Loan Account
I have a revolving loan account, which was originally for $5000 at 12.9% APR. My payments are $100, with $45 going towards interest. Is this right?
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 You should contact your lender and inquire of him. The basic formula is the amount you owe, times the interest rate, divided by the time period, which equals the interest you owe. We don't know your amortization period or your exact balance. You should be able to review your monthly statement and do this calculation. Doing it with your lender, in his office or on the phone, should help. Beware though, this is most often done by computers. Your banker may need warning so he has time to prepare for such an exercise. Variables that need to be included are the days in the period, if the interest is based on the actual days or a 30 day month, is the year based on 360 days or 365/366 and any insurance options.
Published on BankingQuestions.com 10/22/09
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