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Accrued interest in the Loan Exchange

Accrued interest in the Loan Exchange

Accrued interest is the amount of interest-earning by a seller during that month. For example, let us say you own £1,000 of a loan earning 1% per month, you would due £10 each month. If you chose to sell your loan halfway through the month to another lender you would still be entitled to £5 in interest; this is ‘accrued interest’.

If you buy a loan on the Loan Exchange, you also pay the accrued interest to the seller. In return, you will receive the full repayment at the next repayment date. If you sell a loan part, you receive the accrued interest up to that date from the buyer, but will not receive any payment on the next interest date.