I have a CHASE Auto loan. Interest rate 22.25%, I know it ishigh, but I have poo

Question

I have a CHASE Auto loan. Interest rate 22.25%, I know it ishigh, but I have poor credit. The term is for 72 months, of which27 payments have been made promtly. Here are just the last 4payments I have made and how Chase applied them: 09-02-09 paymentrecieved 550.00, principle 212.64, interest 275.25, principlereduction 62.11....10-02-09 payment recieved 550.00, principle234.87, interest 253.02, principle reduction 62.11....11-02-09payment recieved 700.00, principle 306.32, interest 181.57,principle reduction 212.11...12-02-09 payment recieved 700.00,principle 178.35, interest 309.54, principle reduction212.11. Why is the interest fluctuating so much month to month? I have a CHASE Auto loan. Interest rate 22.25%, I know it ishigh, but I have poor credit. The term is for 72 months, of which27 payments have been made promtly. Here are just the last 4payments I have made and how Chase applied them: 09-02-09 paymentrecieved 550.00, principle 212.64, interest 275.25, principlereduction 62.11....10-02-09 payment recieved 550.00, principle234.87, interest 253.02, principle reduction 62.11....11-02-09payment recieved 700.00, principle 306.32, interest 181.57,principle reduction 212.11...12-02-09 payment recieved 700.00,principle 178.35, interest 309.54, principle reduction212.11. Why is the interest fluctuating so much month to month?

Explanation / Answer

You are making varying Monthly payments. Hence your interest &principal components are also varying. Also from your case, it isnot clear what are the Terms of Loan, what is Principal, what arerepayment terms.. It appears that you have a monthly reducing balance loan. Hence theLoan co. takes monthly opening balance, calculate interest on thatamount & deducts the interest from your monthly payment first.Balance amount goes towards principal. Hope you are clear now,.

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