Interest Due

The interest due on a loan is the amount of interest that a borrower has to pay for a specified period within the term.

This is calculated by taking the loan balance and multiplying it with the annual interest divided by the accrual period.

For monthly accrual loans, interest due is calculated by taking the loan balance at the end of the month multiplied by the monthly interest rate (annual rate divided by 12).

When interest due is more than the scheduled monthly payment, the excess becomes deferred interest or negative amortization.

When the monthly payment does not exceed the interest due, interest due will be the same as interest payment.