Interest Calculation

Interest is calculated on your outstanding principal balance, excluding any fees that are not part of the principal debt. This means interest is only applied to the money you borrowed, not to additional charges.

Payment Scenarios

• Payment Made: Interest is compounded monthly and calculated on your outstanding balance, minus any non-principal fees.

• No Payment Made: The monthly interest charged will not exceed the interest accrued in the first month. This caps negative amortization, preventing your principal balance from increasing indefinitely due to unpaid interest.

Instalment Scenarios

• Skip First Calendar Month (Deferred Payment): Interest will not be charged in the first calendar month. Interest charges will begin from the month your first instalment is due.

• Paying More than Agreed: If you pay more than your scheduled instalment, the monthly interest charged will be less than initially agreed upon. This is because interest is calculated on your reduced outstanding balance.

• Paying Less than Agreed: If you pay less than your scheduled instalment, the monthly interest charged will be more than initially agreed upon. This is because interest is calculated on your higher outstanding balance. Paying less can eventually cause a discrepancy between your loan's total balance and the transaction balance. In such cases, an adjustment will be recorded to correct the balance.

Loan Creation Right Before Month-End

When a loan is created just before month-end, and the first instalment is due on that first month-end, monthly interest will be charged on that month-end. For example, if your loan is created on May 30th and your first instalment is scheduled for May 31st, interest will be recorded on May 31st.