Your selected question and answer
Question:
How is interest charged on my loan?
Answer:
Your Tesco Loan includes both your loan capital and the total amount of interest charged for a loan of that size until the end of your chosen loan term. The interest payable over the term is calculated by applying the agreed interest rate to the loan capital on the basis that you will be paying back part of the loan capital each month over your chosen term.
Because your loan capital is higher in the early months of your loan this will result in a larger amount of interest being paid by you in the early months than in the later months. This means that, whilst your monthly payment amount does not vary over your chosen loan term, the proportion of loan capital/interest you are paying each month will change throughout the loan term (ie. interest is not pro rated over the loan term).
