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Debt Consolidation Forums Student Loans and Education Debt forums

Understanding Interest Calculations

Date: Wed, 09/05/2012 12:07
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Hi All,
First post, thanks in advance.
I've recently started monitoring my student loan debt a bit closer and came across what to me seems like impossible math (and I'm educated with a solid math background). Here are two statements pertaining to the same unsubsidized loan, at the end I have two questions:

Statement 1
Statement Date: 5/23/2012
Payment Due: 6/14/2012
Principle Balance: $4876.87
Interest Rate: 2.36%
Accrued Interest on Next Due Date: $9.45

Statement 2
Statement Date: 6/22/2012
Payment Due: 6/14/2012
Principle Balance: $4861.39
Interest Rate: 2.36%
Accrued Interest on Next Due Date: $12.56

Questions:
1. What the heck is accrued interest on next due date referring to? What does this include? From what date to what date? I have never once seen this kind of a term used in a financial statement

2. How is this number being calculated (ie. what is the formula and how would I plug in the numbers I gave to get to the number they came to)?

Ultimately I am working on software to automate a lot of this for myself and others but first I need a firm understanding of these statements which are so poorly organized. Thanks in advance




Call your loan servicing company and ask them. It is complicated.

Sub: #1 posted on Wed, 09/05/2012 - 12:44

SOAPLADY SOAPLADY
Moderators Cum Industry Expert
(Posts: 17319 | Credits: )

For the exact formula you'd have to ask the servicer. However what accrued interest on next due date means is, the amount of interest assessed to your balance from one due date to the next.

Sub: #2 posted on Wed, 09/05/2012 - 13:03

waffles waffles
Moderators Cum Industry Expert
(Posts: 1697 | Credits: )

The servicer is the Federal Government and I've asked before (through email as I prefer everything in writing) and the responses are useless. They never just provide the formula and show me how to plug in my numbers to get the numbers they get. Because it's the government is there a site that has the formula and information? It should be illegal for them to be allowed to loan me money and not explain EXACTLY how their system works - I didn't realize that when I started the concept of a student debt program I'd be facing an issue of the servicer's math being so difficult to follow :-/

Sub: #3 posted on Wed, 09/05/2012 - 13:13

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