Understanding Interest on Your Loan

Interest represents the cost of borrowing money and it begins to accumulate as soon as you receive your loan proceeds. The amount of interest you have to pay depends on the amount of money borrowed, the rate at which interest is charged and the length of time taken to repay the loan.

You loan agreement will clearly state the amount of interest that will be charged on your loan, based on the amount borrowed, any establishment fees that may be charged, and the repayment schedule agreed. 

Provided you make the loan payments as per the agreement (i.e. the correct amount on the correct date), the amount of interest you pay will be the same as specified in the agreement. 

However, if you decide to change the payment schedule once the loan commences (for example, you postpone a payment), then the amount of interest charged will change.  This is because interest is always calculated on the balance outstanding on your loan at the end of each day.  In the example above, because you decided not make a payment in a particular week, the amount outstanding will be greater than originally expected, and so the amount of interest charged will increase accordingly.

It can work the other way as well. If you decide to make an early payment, then more of the loan will be repaid earlier than expected, and so the interest charged will be less.

At Chequers Finance, we endeavour to make the repayment process as simple and straightforward as possible so you know how much you will owe before you take out the loan.

 

How Loan Interest Works

 

Our Simple Fee Structure

We offer loans from $100 to $1000, with the same general fee and interest structure in order to make things as simple as possible for our customers. Our loans generally comprise two fees - an establishment fee and a daily administration fee. Total repayments increase as the term of the loan is increased.

 

The slider tool on our homepage can help you determine the cost of your loan based on the amount you borrow. The loan calculator on our about page can be used to estimate your repayments over different payment schedules, i.e. weekly, fortnightly or monthly.

 

Any Additional Charges?

Occasionally, we have to add an additional charge if a third party service is used to approve a new customer or establish a new loan. However, we always obtain customer approval before using these services and incurring additional charges.

The only other way the cost of your loan can change is if you don’t keep to your arrangement. This could mean you haven’t made all the payments in the amounts or on the dates specified in the loan contract.

 

Implications of Late Payments

Late or missed repayments can have significant implications, with interest, administration and default fees being added to your loan until it is fully repaid. This makes it crucial to understand your obligations and ensure you can afford the loan.

To avoid your debt spiralling out of control if you get into financial difficulty, the total amount of added fees and interest is capped at 100 per cent of the amount of your loan proceeds. For example, if you borrowed $200, the most you would have to repay is $400 (excluding third party collection costs, if charged).

This situation is unlikely as we take care to ensure borrowers can afford their loan at the outset.  Should your situation change however and you find it difficult to make your loan payments, then you should contact us immediately, explain what has happened, and make a payment arrangement with us.

We strive to be reasonable people who understand that your financial situation can change through no fault of your own. We will generally be happy to negotiate a reduction in repayment amounts and figure out a way for the loan to be repaid slowly, rather than chase you down and send you letters.

 

Find Out More

If you’d like more information about our loans, fees and charges, please get in touch with our team by visiting one of our branches, calling us on 0800 243 783, or contacting us online.

 

 

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Interest represents the cost of borrowing money and it begins to accumulate as soon as you receive your loan proceeds. The amount of interest you have to pay depends on the amount of money borrowed, the rate at which interest is charged and the length of time taken to repay the loan.

At Chequers Finance, we endeavour to make the repayment process as simple and straightforward as possible so you know how much you will owe before you take out the loan.

Visit us at any of our branches:

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Chequers Finance Hamilton

Caro House
137 Alexandra Street
Hamilton
Phone: 07 838 2939

Chequers Finance Henderson

334 Great North Road
Henderson
Auckland
Phone: 09 836 6201

Chequers Finance Papakura

155 Great South Road
Papakura
Auckland
Phone: 09 299 7883

Chequers Finance Otahuhu

13 Criterion Street
Otahuhu
Auckland
Ph: (09) 276 4384