Interest Accrual Method Changing This Week
This weekend I made some changes to they way Undebt.it calculates the monthly interest accrued on your debt accounts in an effort to make it more accurate. The way it worked before was that the interest for the month was calculated whenever you made a payment. The main problem was that if you made multiple payments in one month, it would add on another set of accrued interest. The way it will work is closer to how banks calculate the interest on your accounts. Interest will be added to your account on the same day of every month regardless of how many payments you make – or if you make no payments at all. To keep it simple, I chose to use the due date of your debt as the day that the interest gets added on. For example, if the next due date of your debt account is October 10, interest will be added on the 10th of every month going forward.
One issue to be aware of is if you’ve already made a payment this month. Your account balance may be off a little when the new script automatically adds interest to your account. This will be just a one-time issue this month – just manually adjust your balance and you should be good for next month.
I’m planning on turning on this feature tomorrow, 9-9 unless something major pops up. Let me know if you have any issues with the new calculation.
is this still how interest is added? i just set my undebt.it account up last month, and i hit my 5/19 due date on my student loans. i don’t see any interest added, so when i make the payment, my updated balance is too low.