You have made every scheduled payment, yet the loan balance is higher than it was three months ago. That is a reason to inspect the calculation, not simply assume the statement is wrong. Some repayment arrangements allow unpaid interest to join the principal. The next interest calculation can then start from a larger balance.
The US Consumer Financial Protection Bureau explains negative amortisation as a situation in which payments fail to cover the interest due. A permitted minimum payment can therefore keep the account within its agreed payment arrangement while still allowing the debt to grow. The contract determines whether this applies to your loan.
Follow one payment through the statement
Consider a simplified illustration, not a loan quotation. A balance of 10,000 incurs 100 in interest during a period. You pay 70, and the agreement adds the remaining 30 to principal. Ignoring all other charges, the new balance is 10,030. Paying on time and reducing the balance are two separate observations in this example.
Write down four figures from your own statement: opening principal, interest charged, payment received and closing principal. Add fees or other adjustments as separate lines. If those numbers do not reconcile, ask the lender for an explanation in writing. Avoid labelling every increase negative amortisation: a fee, new borrowing or an adjustment may explain it instead.
Find the point where the arrangement changes
Ask when a larger payment becomes due, what triggers a recalculation and whether the quoted payment would reduce principal at the current rate. Also ask how an additional payment would be allocated before sending it.
A useful question is: “If I make only the scheduled payments for the next year, what balance do you project at the end?” Request the assumptions alongside the answer. A projection is not a guarantee, particularly when rates can change. If the higher payment would be unaffordable, contact the lender or an independent debt adviser before the change arrives; the smallest payment today may postpone a difficult decision rather than resolve it.