# How to calculate Credit Union Arrears ???



## RichInSpirit (24 Mar 2013)

I was just entering my transactions from my credit union book into a spreadsheet there. It is slightly in arrears  and the arrears are increasing with every transaction.

I'm not that worried about the arrears but I was trying to do my own calculation for arrears to compare with their quoted figure for arrears and I couldn't get the 2 figures to match up.

Is there some great arrears formula that I haven't heard of ?


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## RichInSpirit (25 Mar 2013)

I'll try it again when I'm in better form. Just trying to reverse engineer the figures a bit.


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## Crugers (26 Mar 2013)

Calculating arrears should be simple so, NO there is no great arrears formula.
Arrears = difference between what the loan balance was expected to be according to the credit agreement and what it actually is!

Can't understand how _"...the arrears are increasing with every transaction..."_ if you are sticking to the terms in the credit agreement.

If you missed one payment but paid all others, in full and on time, then you would always be one payment in arrears.

Only way arrears continually increase is if you continually pay less than agreed - that would include paying the correct amount but paying it late.

If you paid each repayment late and/or short then the arrears would creep up.

Two simple examples below
Borrow €100 on 1st Jan 2013 to be repaid in 10 x weekly repayments of €10.
(Schedule = expected loan balance as per agreement)

This has one missed payment and arrears remain at 1 payment/week in arrears: 


       Date       |     Balance      |     Repaid      |Schedule|     Arrears      
01/01/2013|100||100|0
08/01/2013|90|10|90|0
15/01/2013|90||80|10
22/01/2013|80|10|70|10
29/01/2013|70|10|60|10
05/02/2013|60|10|50|10
12/02/2013|50|10|40|10
16/02/2013|40|10|30|10
26/02/2013|30|10|20|10
05/03/2013|20|10|10|10
12/03/2013|10|10|0|10
19/03/2013|0|10|0|0

This one has continious short payments so arrears creep upwards



       Date       |     Balance      |     Repaid      |Schedule|     Arrears      
01/01/2013|100|0|100|0
08/01/2013|91|9|90|1
15/01/2013|82|9|80|2
22/01/2013|73|9|70|3
29/01/2013|64|9|60|4
05/02/2013|55|9|50|5
12/02/2013|46|9|40|6
16/02/2013|37|9|30|7
26/02/2013|28|9|20|8
05/03/2013|19|9|10|9
12/03/2013|10|9|0|10
19/03/2013|1|9|0|1
26/03/2013|0|1|0|0
HTH


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## unsub (26 Mar 2013)

Don't forget the arrears interest. Are you paying the correct instalment?


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## RichInSpirit (29 Mar 2013)

Thanks for the replies. Great explanation there Cruggars.


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