How are Payments Calculated for a HELOC?

How are Payments Calculated for a HELOC?

While in the draw period, a HELOC must use the Daily Simple Interest method. The HELOC Daily Loan Draw Table Update is run daily to calculate the interest due each day based on that day’s balance. When the payment calculation event is run, the system picks up each day’s interest balance for the billing cycle and creates a total. The amount billed is the actual amount of interest due during the billing cycle. The payment amount for the repay period is determined by the choices you select on the Edit Loan Draw Balance/Repay Options screen.

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