Interest accrues daily against all completed transactions and would stop accruing once the outstanding balance is cleared in full. Interest is calculated daily on the remaining balance, and the accrued interest is applied to your account on the statement date. The statement date is when your monthly statement is generated, showing all transactions, interest, and balances for that period, while the repayment date is the deadline for paying your statement balance to avoid interest charges.
For example, with an APR of 37.15%, the average interest per £1 could be £2.67 per statement if balances are not cleared on time. Additionally, the interest shown on your statement reflects the accrued amount since your last repayment.
Please note that we do have a 35-day interest-free period for those opting to pay their statement balance in full each month. To qualify for this period, the full statement balance must be paid on or before the repayment date.
Please note that we do have a 35 day interest free period for those opting to pay their statement balance in full each month.
Common Scenarios Leading to Interest Charges
1. Missing the Full Balance Payment
If you don’t pay the entire statement balance, even by a small amount, interest will accrue on the remaining balance. For example, paying £793 instead of £793.32 can result in interest being applied to your next statement.
2. Payments After the Repayment Date
Payments made after the repayment date, even if before the due date, may disqualify you from the interest-free period. The timing of your payment matters to avoid interest accrual.
3. Residual (or Final) Interest
If you clear your balance in full but not by the statement or repayment date, interest accrued before this payment may show up as a residual charge on your subsequent statement. This is sometimes referred to as Final Interest.
4. Partial Payments or Payment Plans
Interest charges can also accrue if your payment fails to cover the full monthly balance or if inconsistencies exist between payment plan agreements.
5. Late Payments Due to External Issues
Even if payment delays were due to external reasons, such as wage issues, interest is still applied as per the terms outlined in your agreement.
This interest-free period allows you to avoid any accrued interest as long as you clear your balance by the repayment date. By consistently paying in full, you can significantly reduce your overall interest costs.
To make use of this you would just need to both change your recurring payment amount to the full statement balance in the App and ensure your statement balance is paid before your repayment date or when it is automatically charged on your chosen date.
In order to change your monthly repayment please follow the instructions below:
Go to the "Repay" tab of the app
Tap "Edit monthly repayment"
On the right hand side of the "Amount" row, tap the pencil icon
Enter the amount you would prefer to pay (statement balance), tap save and then confirm.
This will be in effect after your next statement is issued.
FAQs About Interest Charges
Why Was Interest Charged Even Though I Paid My Balance in Full? If your full payment is made after the repayment date, interest may still be applied to your account on the next statement. Additionally, residual interest might appear on a subsequent statement if not paid on or before the repayment date.
How Can I Be Sure to Avoid Interest on Future Statements? Clear your statement balances on or before the repayment date to ensure that no interest is charged, provided no other purchases were made. Setting up automatic payments to pay the full balance is also advisable to avoid errors.
Will New Purchases Be Interest-Free If I Clear My Current Balance? If you pay your current balance fully and maintain a zero balance, new purchases will not incur interest as long as you pay them in full by the next repayment date.
How Is Daily Interest Calculated? Interest is calculated daily on your outstanding balance and stops once the full balance is paid off. Accrued interest is then applied to your account on the statement date.