Interest Accrual Methodology

Interest Accrual Methodology

Interest Accrual Methodology- the calculation of the actual daily interest accrual amount is determined by the interest method assigned to the loan. Calculations will be done systematically as follows.
  • Arrears Interest Method: Calculations is unpaid principal balance times the interest rate divided by 360.
  • Daily Simple Interest: Daily/360 calculation is unpaid principal times the interest rate divided by 360.
  • Daily Simple Interest: Daily/Actual calculation is unpaid principal balance times the interest rate divided by 365 (expect during a leap year). Leap year processing is provided for in the daily processing functionality.

Environment:

Servicing Director

ArticleNumber:

000053868

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