Loan Interest Computation

How Does the Loan Module Calculate Interest?

The Loans system calculates interest based on the codes you establish in code set #622. Currently, there are 3 codes in this set:

• 0 = 30/360
• 1 = Actual/360
• 2 = Actual/Actual

To review how the codes look, you can view the code set by:

• Double-clicking on Name/Address System
• Double-clicking on Setup
• Double-clicking on Codes Maintenance

You will see this screen:

Scroll down until you see code set #622 - Loan Interest Computation Codes, and double-click on that code set. You will now see this screen:

For information on how to configure this code set, please reference this page: Loan Interest Computation Codes

To look at what interest calculation method is assigned to a particular loan, you can do the following:

• From the main menu, double-click Financial Services
• Double-click Financial Inquiry
• Enter the loan # in the Loan field and press Enter or click Search
• When the loan appears, click the Payments tab. You will see this screen:

In the middle of the screen, you will see the computation code assigned to the loan. The number here corresponds with the number assigned to the code value in the code set group.