When AI's loan interest calculation differs from the bank's, do not assume either side is wrong. First align the interest calculation method, then check the interest rate and fees against the contract, item by item. Most gaps come from three places: a different repayment method, an inconsistent conversion between the annual rate and the monthly rate, or fees that may or may not be counted as interest. Once these three are aligned, most figures will match; take any remaining difference to the bank together with the contract.
First, confirm the repayment method: equal installments or equal principal
With equal installments, the monthly payment stays fixed, with more interest and less principal repaid early on. With equal principal, the monthly principal stays fixed, interest falls as the remaining balance drops, and total interest is usually lower. If you did not tell the AI which method applies, it may have used a default method, so its result will naturally differ from the bank's. Check which method the contract states, then ask the AI to recalculate using the same method.
Next, align how the rate is converted
Dividing an annual rate by 12 gives only an approximate monthly rate, and converting a daily rate by multiplying by 30 or 365 can also differ depending on how interest days are counted. Some products distinguish a nominal rate from an effective rate, and once fees are spread out, the real cost can be higher than the headline rate. Copy the annual, monthly, and daily rates from the contract exactly as written, and state whether interest is calculated monthly or daily, rather than giving a rough figure.
Check whether fees are counted as interest
Besides interest, some loans carry handling fees, service fees, or early repayment penalties. The bank's monthly payment may include only principal and interest, or it may spread some fees across installments. If the AI calculated interest alone, its figure will look lower. List every fee in the contract, ask which ones are included in the monthly payment and which are charged at once, and calculate them separately.
Check item by item against the contract
- Whether the loan principal, disbursement date, and interest start date match;
- Whether the repayment method, number of installments, and each due date match;
- Whether the annual, monthly, or daily rate is converted on the same basis;
- Whether handling and service fees are counted in the interest or the monthly payment;
- Whether any early repayment or overdue clause affects the current installment.
What to do if it still does not match
If all three areas are aligned and the figures still differ, compare the key contract pages, the bank's repayment schedule, and the AI's calculation side by side, focusing on the outstanding balance and the current interest rows. If questions remain, contact the bank's customer service or visit a branch, and treat the contract and the bank's repayment schedule as authoritative. This article explains only how to check the figures; it is not financial advice, and decisions about early repayment or switching loans should follow the contract terms and your own circumstances.
