The Interest Savers

SAMPLE STATEMENT 5 HOME LOAN CHECKER
INTEREST CHARGED ON 10TH NOVEMBER 1998 UNDERCHARGES

Notes: VERY, VERY OCCASIONALLY THEY DO UNDERCHARGE !!

1. The start date is the date of the drawdown ( start of this loan ) 9th October 1998.

2. The end date of 9th November 1998 is the date prior to the ‘interest debit’ being checked
( 10th November 1998).

3. The opening balance is the last balance shown at the end of the start date ( $75,180.06 ).

4. The interest rate is the interest rate shown on the statement. The interest rate should be shown on your statement. If it is not shown, the lender must provide the interest rates.

5. The number of days box is automatically set at 365 days which is used in the lenders formula.
You may change this to 366 days for leap years as the lender should use 366 in their formula for
leap years.

6. When the balance changes the new balance at the end of the day is inserted by clicking the ‘ADD’ box shown on the left hand side of the screen under Daily Balance Entries.
Lenders calculate interest each day on the balance at the end of the day.

7. The Revised Interest Rate box at the top right side of the screen allows for interest rate changes.

8. The Interest Debit amount at the bottom of the screen shows the interest that should be on the statement ( $439.48 - the statement shows $220.41 which is incorrect ). This is an undercharge of $219.07 for the month The other months shown on the statement are all undercharged!
This is obtained by clicking the Compute Interest box.

Page 1 of 1

[1] Name of lender.

[2] Address of lender.

[3] Telephone number for statement and account enquiries.

[4] Facsimile number of the lender.

[5] Name(s) and address of the borrower(s)

[6] Account type and account number.

[7] Telephone number for lost and/or stolen cards.

[8] Statement Period: This statement begins on 9^th October, 1998 and ends on 9^th January, 1999.

In this case it is a three-months period. It should show all transactions that have occurred during that period. E.g. It will show :

· the opening balance [ i.e. the balance owing at the start of the period ]

· the closing balance [ i.e. the balance owing at the end of the period ]

· all credits [ i.e. all repayments and any other payments and or reversals

made to the account to reduce the balance owing ]

· all debits [ i.e. all interest charges (usually monthly)

all bank fees and charges (usually monthly)

all government fees and charges (usually monthly)

any reversals that will increase the balance owing.

[9] Page 1: This is the 1^st and only page of the statement.

[10] Date Column: The dates on which each transaction occurs are shown in this column.

There may be more than one transaction on any date.

Debit transactions (Interest Charged, Bank Fees and Charges, Withdrawals, Government Charges etc.) will increase the balance owing

Credit transactions (Repayments made by the borrower) will reduce the balance owing.

[11] Transaction: This column shows a description of the transaction.

i.e. Repayment (reduces the balance owing)

or Interest Charged (increases the balance owing)

[12] Debits Column: This column shows the dollar amount of each transaction that increases the balance owing.

E.g. Interest Charged

[13] Credits Column: This column shows the dollar amount of each transaction that decreases the balance owing.

E.g. Repayments

[14] Balance Column: This column shows the balance owing after each transaction and/or at the end of each day

when a transaction has occurred.

[15] Totals at end of page:

The total amount debited to the account during the period was $76,314.04.

The total amount credited to the account during the period was $2,962.41.

The balance owing by the borrower at 9^th January, 1999 is $73,351.63.

[16] Final balance may be subject to adjustment: This statement is to cover the bank in the situation

they have made a mistake and/or any of the periodic payments are dishonoured.

[17] Interest Rate: An interest rate of 6.70% is used.

All of the interest charges are incorrect. In this case the bank has ‘undercharged’ the

borrower. See below.

TRANSACTIONS

1998

09 Oct Balance Brought Forward At the start of the day there was a nil balance owing by the borrower.

Opening Interest Rate The interest rate being charged on the new loan is 6.70%.

Loan Drawdown A loan of $75,542.47 was made available to the borrower on this day.

The ‘odd’ amount of $542.47 was probably to cover ‘fees and government

duties’.

Loan Payment The amount of $162.41 was probably to cover special fees.

Loan Payment The payment of $200 was the first of 1,300 weekly payments over 25 years.

16 Oct Periodic Transfer – Payment This is a weekly repayment of $200 automatically transferred from the

borrowers bank account and reducing the balance owing to $74,980.06.

23 Oct Periodic Transfer – Payment This is a weekly repayment of $200 automatically transferred from the

borrowers bank account and reducing the balance owing to $74,780.06.

30 Oct Periodic Transfer – Payment This is a weekly repayment of $200 automatically transferred from the

borrowers bank account and reducing the balance owing to $74,580.06.

06 Nov Periodic Transfer – Payment This is a weekly repayment of $200 automatically transferred from the

borrowers bank account and reducing the balance owing to $74,380.06.

10 Nov Interest * Interest of $220.41 has been debited to the borrowers’ account increasing the

balance owing to $74,600.47.

* This interest calculation is incorrect!

Effective Date: 09 Nov 1999 Interest was calculated from 9^th Oct to 9^th Nov inclusive.

13 Nov Periodic Transfer – Payment This is a weekly repayment of $200 automatically transferred from the

borrowers bank account and reducing the balance owing to $74,400.47.

20 Nov Periodic Transfer – Payment This is a weekly repayment of $200 automatically transferred from the

borrowers bank account and reducing the balance owing to $74,200.47.

27 Nov Periodic Transfer – Payment This is a weekly repayment of $200 automatically transferred from the

borrowers bank account and reducing the balance owing to $74,000.47.

04 Dec Periodic Transfer – Payment This is a weekly repayment of $200 automatically transferred from the

borrowers bank account and reducing the balance owing to $73,800.47.

09 Dec Interest * Interest of $254.06 has been debited to the borrowers’ account increasing the

balance owing to $74,054.53.

* This interest calculation is incorrect!

11 Dec Periodic Transfer – Payment This is a weekly repayment of $200 automatically transferred from the

borrowers bank account and reducing the balance owing to $73,854.53.

18 Dec Periodic Transfer – Payment This is a weekly repayment of $200 automatically transferred from the

borrowers bank account and reducing the balance owing to $73,654.53.

29 Dec Periodic Transfer – Payment This is a weekly repayment of $200 automatically transferred from the

borrowers bank account and reducing the balance owing to $73,454.53.

1999

02 Jan Periodic Transfer – Payment This is a weekly repayment of $200 automatically transferred from the

borrowers bank account and reducing the balance owing to $73,254.53.

08 Jan Periodic Transfer – Payment This is a weekly repayment of $200 automatically transferred from the

borrowers bank account and reducing the balance owing to $73,054.53.

10 Nov Interest * Interest of $297.10 has been debited to the borrowers’ account increasing the

balance owing to $73,351.63.

* This interest calculation is incorrect!

YES NO

[1] A Summary Page to show the following information: *

Borrowers’ name and address *

Borrowers’ account number *

Number of statements issued *

Page number for this statement *

Statement Start Date *

Statement End Date *

Previous Statement end date *

Opening Balance *

Closing Balance *

Total of all Credits *

Total of interest charged for the period *

Total of bank fees & charges for the period *

Total of govt. fees & charges for the period *

Total of all reversals during this period *

Current interest rate charged *

Interest rate changes *

Required minimum repayments *

Lender’s telephone number for enquiries *

MAIN STATEMENT to include:

[2] Borrowers’ name and address *

[3] Borrowers’ account number *

[4] Number of statements issued *

[5] Page number for this statement *

[6] Statement Start date *

[7] Statement End date *

[8] Date Column *

[9] Transaction Description *

[10] Debits Column *

[11] Credits Column *

[12] Balance Column *

[13] Interest Rate *

[14] Interest Rate Changes & dates *

[15] Lender’s telephone number for enquiries *

MISTAKES and/ or ABNORMALITIES in this Statement :

[1] All of the interest charges are incorrect. In this case the bank has ‘undercharged’ the borrower:

10th November = $220.41 (should be $439.48)
9th December = $254.06 (should be $394.84)
9th January = $297.10 (should be $418.83)

[1] International Bank Lender No. 6

[2] Address : Level 1, 111 Sneaky St. [6] Statement Period:

Pickpocket Valley. From: 25^th May 2000 To: 25^th Aug 2000

[3] Statement & Account Enquiries: 56890045

[4] Fax: 56790453

[5] Account name(s): H & G Customer [7] Account type and number

22 Borrower St Home Loan 333-400977

Loanville.

Date [8] Transaction [9] Debits [10] Credits [11] Balance [12]

2000 Opening Balance -251,017.95

01 Jun Deposit-TRF 1941.10 -249,076.85

01 Jun FID – Govt Duty 1.17 -249,078.02

26 Jun INTEREST 1728.06 -250,806.08

03 Jul Deposit 1937.50 -248,868.58

03 Jul FID – Govt Duty 1.17 -248,869.75

14 Jul Deposit 3000.00 -245,869.75

25 Jul INTEREST 1557.87 -247,427.62

01 Aug FID – Govt Duty 2.96 -247,430.58

25 Aug INTEREST 1687.87 -249,118.45

25 Aug CLOSING BALANCE -249,118.45

[13] Interest Rates From: 11 May : 7.90%

08 Aug : 7.92%

[14] Statement No 12 Page : 1 of 1

[15] Please check your statement promptly and notify the bank immediately of any errors.

[16] Note: This is a ‘leap year’ and the bank should have used 366 days in calculating the correct interest rate

formula to apply to outstanding balances. The bank has used 365 days in their formula resulting in the bank overcharging INTEREST by approximately $4.50 per month.

This particular bank would have many million accounts which would result in a significant ‘additional profit’ every 4 years.