Interest accrued but not due

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rohit (Querist)
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16 August 2013 WHAT IS THE DIFFERENCE BETWEEN
INTERST ACCRUE AND DUE
INTEREST ACCRUED BUT NOT DUE

EXPLAIN WITH EXAMPLE?

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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16 August 2013 I will explain you the above your doubt with the following example because of for your clear understanding.

Example: Mr.A having a loan of Rs.100000 @ 12% p.a. interest on 1-4-2013 Loan conditions is interest has to be pay every month by 5th of the following month if fail to pay then additional interest shall be charge @2%p.a for the delay period and principle amount can be pay by the A at his will. I.e means payment of interest required every month. According to the terms and conditions of the loan April'13 interest shall be pay by 5th of May'13.

So interest shall be accrued every month by 31st or 30th it self of the each month but time available for payment of interest is upto 5th of next month. That means interest due on 5th of the next month thus from 1st of the next month till 5th of the next month called "Interest accrued but not Due" after 5th of the next month called "Interest accrued and due" because of interest is due from 5th of the next month.

Thus for your clear understanding April'13 interest will accrued on 30-4-2013 but this amount can be payable by 5-5-2013 i.e due on 5-5-2013. so from 1-5-2013 to 5-5-2013 it is called "Interest accrued but not due" and from 6-5-2013 it is called "Interest accrued and due"(assume if the amount not paid by 5-5-2013).

In one word interest accrued but not due means Interest amount computed as per the period of computation but the payment of amount of installment time is still available.

Interest accrued and due means interest amount computed as per the period of computation and the time given for payment of amount of installment time also over and elapsed.

Still you have any doubt please write freely.

OM SAI SRI SAI JAI JAI SAI

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