Accrue, Accrued Interest and Accrual or Accrual Date
"Accrue, Accrued Interest and Accrual or Accrual Date" submitted by SchoolGrantsfor Editorial Team and last updated on Monday 9th January 2012
To accrue is to accumulate. The process whereby interest accumulates on your loan. When we speak of "interest accruing on your loan," we mean that the interest due on your loan is accumulating.
Accrued Interest/ Capitalization
Capitalization is the practice of adding unpaid interest charges to the principal balance of an educational loan, thereby increasing the size of the loan. Find out more . . .
Accrual or Accrual Date
The date on which interest charges on an educational loan begins to accrue or be charged monthly on an educational loan.
The accrual date on a loan is the date when the loan starts to earn interest. On many educational loans, the accrual date is a few months after graduation.
One important thing to understand about the accrual date is that the money you owe is not gaining any interest before the accrual date. If your loan allows you to make payments while you are still in school, making some payments before the accrual date can be a good way to save some money on your loan.
Make sure you are well aware of what the accrual date is on your loan, and plan your repayments carefully around it, starting early if you can. Once the loan hits the accrual date, you earn interest every month that you carry the loan. The total interest at the end of the year will equal the annual percentage rate, or APR, that you agreed upon when the loan started.
To figure the monthly interest you will be accruing on your student loans, follow the instructions below:
- If your interest rate is:
- 5.6% multiply $_______ by .00467 = $_______ interest per month (student loan amount)
- 6.0% multiply $_______ by .00500 = $_______ interest per month (student loan amount)
- 6.8% multiply $_______ by .00567 = $_______ interest per month (student loan amount)
- 8.25% multiply $_______ by .00688 = $_______ interest per month (student loan amount)