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In my first payment on 06-17-2016, the principal applied to my balance was $186.76 and the interest was $107.50. As I kept making the payment on-time, the second payment on 07-25-2016 was a bit of a shock to me as the principle went down to $93.97 and the interest went up to $200.29.
I thought as I kept making payments on-time, the applied interest should decrease every time and the applied principal should increase. Am I wrong?
This is how my loan payment history statement looks like:
Interest is calculated daily.
Doing the math:
Between 6-17 and 7-25 are 38 days, 200.29 / 38 = 5.27 interest per day.
Between 7-25 and 8-17 are 23 days. 120.02 / 23 = 5.22 interest per day.
The minimal difference is because the principal has already gone down a little bit.
So you should expect ~5.20 x number of days for the next interest number coming up; slowly decreasing as the remaining principal debt decreases.
Note that this is equivalent of an annual interest rate of over 20 %, which is beyond acceptable. In the current economy, this is ridiculously high. I recommend trying to get a refinancing with another provider; you should be able to get it for a third of that.
The interest probably accrues daily, regardless of whether your payments are on time.
