Help in understanding interest charges calculation

[ltf4ever]

i somehow miscalculated my amount due and amount I already paid, leading to 500 rupees being paid less by the due date. total due was 15k and i paid only 14.5k before due date.

the remaining amount i cleared 4 days after the due date.

the apr is 9% that is 0.75% per month.
idfc has levied 114 rupees as interest charges (excluding gst).

i was always assuming that interest is charged only on the balance amount. but by their calculation, they have charged 0.75% of the TOTAL amount (15k) for 1 month.

need somebody who has experience in this, as this is the first time that i have to pay interest🙁

 

[rp0703]

i somehow miscalculated my amount due and amount I already paid, leading to 500 rupees being paid less by the due date. total due was 15k and i paid only 14.5k before due date.

the remaining amount i cleared 4 days after the due date.

the apr is 9% that is 0.75% per month.
idfc has levied 114 rupees as interest charges (excluding gst).

i was always assuming that interest is charged only on the balance amount. but by their calculation, they have charged 0.75% of the TOTAL amount (15k) for 1 month.

need somebody who has experience in this, as this is the first time that i have to pay interest🙁

Yup, that's the trap. Even if you had a small amount unpaid, they are going to charge interest on the entire due amount. That's why I always pay Rs. 20 to Rs. 30 more than due amount. Anyway, how did you miscalculate the due amount?

 

[visvin]

With the recent RBI rules, banks can only charge interest on 'unpaid' amount i.e. ₹500. You should be charged approx. ₹8 on unpaid balance @9% 31 to 48 days of credit.
Email them to explain the interest calc, if it says the full amt, send them new RBI rule link (Technofino put them on this website, search for it) and ask them to re-calculate the charges else you'll go to RBI banking ombudsman.

 

[ltf4ever]

Yup, that's the trap. Even if you had a small amount unpaid, they are going to charge interest on the entire due amount. That's why I always pay Rs. 20 to Rs. 30 more than due amount. Anyway, how did you miscalculate the due amount?

i have a habit of paying min due as soon as the bill gets generated, and pay the balance remaining a few days before due date.
this time i got confused while looking at total outstanding that already had some purchases and some refunds.

With the recent RBI rules, banks can only charge interest on 'unpaid' amount i.e. ₹500. You should be charged approx. ₹8 on unpaid balance @9% 31 to 48 days of credit.
Email them to explain the interest calc, if it says the full amt, send them new RBI rule link (Technofino put them on this website, search for it) and ask them to re-calculate the charges else you'll go to RBI banking ombudsman.

thanks! i will do that. my only concern is that the new rules came into effect on 1st Oct and the statement cycle is 15 Sep - 15 Oct. and the bank will try to say that the cycle started before 1st Oct etc etc. Unless this particular rule came into effect in July. I will read the rbi notification and raise a complaint accordingly. i had asked the detailed breakup to them yesterday, but they gave a reply with the definition of interest charges and closed the ticket.

 

[ltf4ever]

update:

i had sent them an email asking for a detailed breakup of these charges and I also quoted RBI clauses around interest charges.

They reversed my charges today.

thanks everyone who helped!

with banks nowadays, it is 'nazar hati, durghatna ghati'. be always vigilant.