Because the loan is now in default, and thus the fixed terms of the original monthly payments (amortized over the term) has changed.
The unpaid principal balance has not been paid down as agreed. Taking of a charge-off does not negate continued obligation for the debt, including interest payable for continued use of their money.
Additionally, there may be fees that apply for the defaulted on the loan.
The default terms set forth in the installment loan agreement now apply, not the set monthly payments for a loan in good-standing.
What are the loan agreement terms upon default?
