This shows the annual interest rate using five decimal places.

This field is called Payment Rate only for ARM loans (payment method 7), and for daily simple interest loans (payment methods 4 and 6) with the Use ARM Fields field checked on the Payment Detail tab. It is the rate entered or calculated at which the payment is being made. For these loans, you must enter the interest rate in the Current Rate field on the ARM Information screen for interest to be calculated on this loan. This is generally used with a Index Rate Pointer other than "255."

If the rate is changed on daily simple interest loans (payment method 5 or 6), the accrued interest is recalculated to the current date using the old rate, and the Date Last Accrued is changed to today's date.

If this field is changed and <Save Changes> is clicked, the system will save all other changed information on this screen but give the user a chance to opt out of (or confirm) saving changes to the Interest Rate specifically. A dialog will appear as shown below:

This field is usually file maintained by the system, but can be adjusted by the user if necessary. The To field (LNDLAC) displays the date interest was last accrued.

Conventional Loan (Payment Method 0)

The date of last interest accrual for conventional loans should always be one payment frequency behind the Due Date. For example, if the loan Due Date is 10-01, the date last accrued should be 09-01. Interest for a payment is usually calculated from the date last accrued to the Due Date for a loan that accrues using a frequency, unless the Interest Calculation Method (below) is "101," "102," "103," "104," or "105."

Interest Bearing (Payment Method 6)

Simple-interest loans (also known as interest bearing) accrue interest from the date last accrued to, but not including, the date a payment is applied.

Precomputed Loans (Payment Method 3)

Precomputed loans accrue from the date last accrued to the next month.  Such accrual is performed in batch processing only.

LIP Loans (AKA Construction Loans)

Loans with an LIP Method Code of "1" or "101" will accrue to the current date each time an LIP disbursement is made, or the LIP interest rate is changed.

A GOLDWriter report and Variable Screen mnemonic (LNACRINT) is available that will accrue loan interest either to or through today. The calculation is the same calculation used on the Payoff screen. The mnemonic uses the same institution option as for payoffs to determine if the calculation is to or through today.

This date is not used for interest calculation purposes anywhere in the GPS system, but is provided on this screen for loan servicing convenience.

The system enters this information, but the field can also be file maintained.

For conventional loans (payment methods 0 and 7), if this

doesn't stay one cycle behind the due date, the P/I Constant field could be incorrect, so the system will not let you update this field to any date other than one month behind the Due Date.

For daily simple interest loans (payment method 6), this field is calculated in the following way.

•When a payment is posted, the Date Last Accrued is changed to the Date Posted. The system then takes the amount in the Principal Balance field and multiplies it by the loan Interest Rate and divides it by the interest calculation code base (this determines the per diem). It then divides the ACCRUED INTEREST by the per diem and calculates the number of days. The number of days is subtracted from the DATE LAST ACCRUED and that becomes the DATE INTEREST PAID TO. When calculating the number of days, the system rounds up. For example, if the number of days is 14.9, then 15 days will be used.

Line-of-credit loans (payment methods 5, 9, and 10) are the same as payment method 6 except as follows:

•For periodic loans (the Interest Collected With Payment is set to Periodic on the Loans > Line-of-Credit Loans screen), the Date Interest Paid To does not change until the full payment is paid. At that time, the Date Interest Paid To will be the date of the finance charge connected to the loan Due Date.
 
For example, the loan has a Due Date of 8-1 and the finance charging (billing date) is done 15 days prior (7-16). When the 8-1 payment is posted, the Date Interest Paid To would become 7-16. On 8-16, the finance charging would be done for the 9-1 payment. When the 9-1 payment is posted, the Date Interest Paid To would become 9-16. (Regardless of what day a payment is posted, the Date Interest Paid To is the date the finance charge was processed.)
 
Note: Revolving card loans (payment method 5 with LNCARD = "Y") are only Periodic.

•For daily loans (the Interest Collected With Payment is set to Periodic on the Loans > Line-of-Credit Loans screen), the current and previous finance charges are added to the amount in Accrued Interest. The above-mentioned calculation for daily simple interest is then performed.

For payment method 0 and 7 loans only, if a loan has been sold to an investor, any time a principal decrease (tran code 510) or correction (tran code 518) is processed, the system will write to history the "date interest is paid to."  This date is not changed but is written to history so that for scheduled/scheduled reporting, the system can use this date as the payment date for the curtailment.

Institution Option PIWD is available for payment method 6 loans. If this option is set, when a payment is posted (600 transaction code only), interest will only be paid in full-day increments. For example, if the per diem is $5.50, only multiples of $5.50 would be paid to interest ($5.50, $11.00, $16.50, etc.), up to the full amount of interest owed. Any remaining amount will be applied to principal. If the amount paid is less than the per diem, no interest will be paid.

The result of this option will be a more accurate Interest Paid To date.

Example:

A payment of $100.00 divided by the per diem of $3.14 will be 31. The per diem multiplied by 31 is $97.34. The remainder of the payment ($2.66) will be applied to the principal.

This code is used for all payment methods except "3," Precomputed. The possible methods are as follows:

001 - 365/365 days per year

002 - 360/360 days per year

003 - 365/360 days per year

004 - 360/365 days per year

005* - 366/366 days in a leap year

The following codes are used to allow the loan's Date Interest Paid to (above) and Date Last Accrued to be other than one frequency behind the Due Date. As payments are made, the loan will simultaneously advance each of these dates one full frequency, and will not require them to stay synchronized. If these codes are not used the system will force the Date Last Accrued and Date Interest Paid to to (see above) be one full frequency behind the Due Date for loans that pay over a frequency period.

101 - 365/365 days per year

102 - 360/360 days per year

103 - 365/360 days per year

104 - 360/365 days per year

105 - 366/366 days in a leap year

For bi-weekly loans, use 01 or 101, 14 days and a 365-day year.  The interest is calculated by the system as follows:

Principal Balance X Interest Rate / 365 X 14

The payment is always due on the same day of the week, such as Monday, Tuesday, etc., and not on the calendar day, such as the 1st, 2nd, etc.

The following criteria explain the interest calculations in the loan accrued interest report.

The total accrued interest for each loan is calculated using the following rules.  However, if the loan is payment method 0, the system begins by taking the amount in interest due less interest for one full frequency plus the appropriate following calculation.

If the payment frequency is "01" and the date last accrued is exactly one frequency prior to the end of current month, then:

Accrued Interest = Loan Balance X Interest Rate / 12

If the payment frequency is "01" and the date last accrued is less than one month, then:

Accrued Interest = (Loan Balance X Interest Rate / 12) X Days Accrued / Days In Month

If the payment frequency is "01" and the date last accrued is greater than one month prior to the end of current month, then:

Accrued Interest = (Loan Balance X Interest Rate X # of Full Months Due / 12) + {(Loan Balance X Interest Rate / 12) X # of Days Less Than One Month / # of Days in Current Month}

If the payment frequency is not equal to "01" then:

Accrued Interest = (Loan Balance X Interest Rate X Payment Frequency / 12) X # of Full Payment Frequencies in Accrual Period + {(Loan Balance X Interest Rate X Payment Frequency / 12) X # of Days Short of One Full Frequency} / No. of Days in the Current Frequency.

If this is an ARM loan (payment method 7), the interest calculation will look at the rate change frequency and date.  If the loan is in the middle of a rate change, the system will perform the interest accrual based on the old rate up to the rate change date and then use the new rate for the remaining days, in addition to the four criteria listed above for payment method 0 loans.