If I look at your schedule versus the bank, what I see is that you are including interest accrued up to the date you made the payment (12.20 vs 11.27), while the bank's statement is including interest up until the statement cut off period, or cycle, (12.05 vs 11.27). The payment was applied based on the cut off (cycle) date, which is 14 days less than you are including in your calculations.

If you had paid off the entire balance on 12.20, the bank would have sent you a final statement for the interest due from 12.05 to 12.20.

Never ever make a payment on the date the payment is due. Always alow additional time for processing and mail time unless paid on line. Even on line if you do a payment there can be several days before the transfer then several additional days before the payment is processed and applied.

This is where you are getting in trouble. If posible set up your payments a week in advance of when they are due.

Why are you posting this 2 and a half years later?

Basically, your payments for mortgages etc are supposed to post the day they are received and be credited based on the standing of your account at that instant. If you don't send your payment in time to make the agreed upon billing cycle, then your payment will go to the interest from the prior cycle plus whatever has accumulated in the current cycle.

In the bigger picture - you need to get this paid down asap. Stretching out payments for "maintenance projects" over years is a quick way to get to the poor house.

cindyb -yes, that makes sense. But I guess I'm having trouble figuring that on 12/20 when I make my payment, the principal balance is reduced effective 12/05. But am I accruing on the reduced balance from 12/05 to 12/20 when I made my payment? That's what doesn't make sense.

Billl~ I agree with you. That is the way I thought the payments were being applied. My note reads that way too, but that is not the way it is being applied. I have actually been trying to get an answer from the bank (credit union) since December without luck. Nobody understands it and nobody can explain why all of a sudden my total payment goes to interest instead of interest, and then principle. It was 6 months ago that I began to see this.

Yes, we are going to refinance our 1st and include this equity line to pay it off. Or we may end up selling to buy a smaller house. We have used the line to upgrade and repair which is mostly complete now. Our house was built in 1927, and while it has charming features, it sure needed alot of work! We have plenty of equity in the house and wanted to use it for repair and upgrades. We still have plenty of equity even after consolidating the two notes into a refinance. Thanks all!

If I remember right this happened to me once on a car loan - I am referring specifically to applying the overage paid to the interest vs the principal. Thy told me it was in my loan documents that overages (no matter when paid) default to future interest. If I didn't specify at the time I sent the payment how to otherwise apply the overages, that was the default. I think there may have been an option to permanently change this, but I don't recall the specifics as it was probably 15 years ago...

Good luck in figuring it out!

Some banks calculate interest on a 365/360 basis versus 365/365. This could easily explain the difference. Real your credit agreement.