Its the amount of interest incurred on the principal amount over the given time.

It's just another term for "Interest" for your loan.

the interest portion in your installment is also accrued interest, which is paid by your installment.

i'll give you an example;

When you approach the bank with the intention to settle your HL account, you will settle the outstanding in the loan account right?

So what happens if your the billing is on the 1st of the month, and you approach the bank on the 10th day of the month?

The bank will charged the interest of 10 days, adding it into your outstanding balance, which gives you the new outstanding figures.

That 10 days of interest is "accrued interest"

Technically, accrued interest has the same calculation formula as the loan interest. If its a daily rest loan, then its a daily rest calculation.

ignore the big words, its actually the same thing as interest on your installment.

drop me a call if you need an explanation on the terms. kinda hard to put in words actually.

hope the above helps

-Lets just put aside the redemption amount here. Its more understandable when u know the standard practice of the whole thing. Regardless of the 3 different dates, you are still require to service the installment until the completion of account closing. Its not about the interest, but the CCRIS report. All banks are require to send in the activity report to BNM for CCRIS reference data base for all accounts, and customers. Which is why u shouldn't skip the installment even though if you are closing the account soon. CCRIS wouldn't know if u r closing the account, all they do is just received the details from the banks and update on monthly basis.

Yes, do expect a refund from the bank if the account is overpaid.



-yes, the redemption amount is calculated base on the schedule installment, excluding all other factors such as capital prepayment, LPI(Late payment interest), fire insurance premium etc. They will need to recalculate a new amount if there's any unexpected adjustment on the outstanding before the account is closed.

hope the above helps.

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Added on February 27, 2010, 9:11 pm-Accrued interest is calculated based on the outstanding of the account. Technically, it would be 0 accrued interest in the scenario, but i'm not very sure how they do it under full-flexi loan structure. it is best you check with ur bank officer.

This post has been edited by merce: Feb 28 2010, 02:57 AM

yes