Precomputed accounts pay off differently than simple interest or periodic interest accounts if paid off before maturity. See help for the Renewal/Pro-rate field and Accelerated Balance fields, which affect how precomputed interest is calculated and refunded back to the customer.

Same as Cash accounts refund all interest paid if the account is paid off in a specified time period. When processing payoffs on these accounts, the system looks for an active Action Code 74 on the account. The date associated with the Action Code can be any number of days after the loan was opened. The loan account is treated as a normal loan with all payments spread out according to the Payment Application on the loan (pay to principal and interest first, then reserves, then fees, then late charges, etc). If the loan is paid off prior to or on the associated date, the interest found in the Actual Interest Paid field is applied to the principal balance as part of the payoff quote and in the actual payoff. If the payoff is after the Action Date, this action is not taken.

Payoff Quote messages are modified to remove references to interest accrual for these loans.

Some states regulate how much uncollected accrued interest may be collected if the interest-bearing loan is paid off for purposes of opening a new loan (renewals). For example, North Carolina only allows institutions to collect 90 days of unpaid interest during payoff for renewed loans.

Additionally, Kentucky requires to waive any late charges or miscellaneous fees that may have been assessed within 60 days of the payoff for renewal.

See the Renewal/Pro-rate field and Per State Renewal Regulations for more information.