A new thing learned

I wandered into my brick and mortar this week with a $250 lump sum payment. I had blogged earlier this month, wondering if my interest was daily or added on at the end of each month. I confess to low knowledge level on such things as interest and rates  and such.  I had emailed my bank. I have to say that BMO has fantastic response to email inquiries...even on weekend. This time the answer I got was long and vague and basically said 'refer to your loan documents or check with your local bank'. Being mature and all I groaned "ohhhhh mannnnn they want me to READ that thing?" lol

I honestly didn't have a chance to do the reading part. It's been insane here. I did wander in to my brick and mortar and was reminded again why I like GOING to the bank. They know me (ish) and me them, and I can ask questions that might make me sound like an idiot but I suspect they aren't going to the coffee room to mock me later lol

After a few clicks they said that the interest is per diem. If I am going to make a lump sum payment and want to maximize the interest saved, then it needs to be at the beginning of the new loan month. My loan comes out on the 26th of each month, so they suggested that if I am going to make one, do it before the 1st of the month to maximize things. Good advice.

Makes me want to kick myself a bit as last month I made a whopping $300+ lump sum, but did it the day BEFORE the loan came out.  While that sum definitely helped me reduce the total amount owing, it didn't affect the principal/interest ratio of the 26th payment.

I recall awhile back when I lum summed early in the month and there was a $50 favourable difference in the principal/interest ratio. I will have to go back through my stats to find it.

At any rate, I learned something new and when I am finished with this loan, I can use what I've learned on the  vehicle one.

Happy Saturday everyone. Stay warm.