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# Accrued Interest Calculator

The Accrued Interest Calculator allows you to calculate your true cost of borrowing money, this includes accrued interest rate, total interest and daily accrued interest from the given values of investment amount, holding period and interest rate.

 Investment Amount \$ Holding Period days Interest Rate %
 Accrued Interest cost = \$ Accrued Interest Rate = % Daily Interest cost = \$

## What is Accrued Interest?

Accrued interest is part of the cost borrowing money. When you borrow money from a lender, you are required to make repayments (typically monthly) to repay the money borrowed. This repayment includes the principal, taxes, insurance(s) and the interest. The amount of interest that accumulates between payments is known as accrued interest. Accrued Interest is the interest that has accumulated from:

1. the duration between two payment-due dates, for example 01 January 2020 and 01 February 2020
2. the total amount of interest paid on a loan over time

## How do I reduce the Accrued Interst on a Loan?

With all borrowing, the longer it takes you to repay the loan, the more accrued interest you will pay. If you are keen to repay a loan earlier, try our Debt Payoff Calculator

## Accrued Interest Calculator: Calculate the Interest You Actually Pay

Loans and related facilities are available in abundance in the market these days, but is it wise to take any number of loans without checking the facts properly? Sometimes, when in desperate financial need, we go for quick schemes and then pay interest to the banks or non-banking financial companies, which is far higher than it could be.

The term accrued interest is used to refer to an amount of interest that you are going to pay, which means it has been incurred but not paid out.

When borrowing money from banks we are usually provided with a short brief of the lending terms and conditions, which are not always very detailed and are often confusing. Calculating Accrued interest can help you in many ways to deal with the confusing terms and understand the financial nitty gritty:

• It will help you decide if the loan you are about to avail is worth it when considering the interest due.
• It will give you daily cost of the loan so you will have the actual numbers to manage your finances.
• It will help you compare various loan schemes, which are offered by different banks.
• It makes you aware beforehand of how much it would cost you to keep the money for a certain period of time if you decide to pre-close the facility.
• Since you will have the actual figures, you can ask the bank to give you their calculation for comparison in order to avoid any hidden charges.

### Accrued Interest is Expense as well as Revenue

The term 'Accrued' interest can be used to refer to both expense and revenue.

#### Accrued interest expense

When you pay the interest for a loan it is referred to as accrued interest expense, because it costs an individual or a company money to have the facility.

#### Accrued interest revenue

In case of banks or the lending companies the calculated interest for a particular period of time can be referred to as interest revenue, because the lender will be liable for the interest that has already occurred.

A good example of accrued rate is selling or buying bonds. When investors sell their bonds they get the accrued part of interest, which has been accumulated since the day they purchased the bond. In this case, the accrued interest will be a revenue for the investor and an expense for the financial institution.

### Using the Accrued Interest Calculator

The accrued interest calculator provides you with real time, cost which you are going to pay for any loans that you decide to borrow. The accrued interest calculator shows you the below mentioned fields:

1. Investment amount
2. Holding period and
3. Interest rate

Once you enter these details, you will get the results instantly (explained below).

#### Accrued interest cost

This value stands for the total amount that it costs you for the selected number of days as interest on the full investment amount.

#### Accrued interest rate

It means the total rate of interest, which you will be charged for those days on total amount.

#### Daily interest cost

You will have the cost of daily interest that will be charged to you on the entire amount of borrowing.

### Benefits of using the accrued interest calculator

iCalculator focuses on making your calculations easy, so the calculator you will use will help you in many ways, like:

• Time saving - The calculator is online, easy to use with just 3 basic entries required to know the actual cost of your loans.
• Use it or lose it - The calculator gives you real time numbers and you can use them to get the best deals banks can offer, trust us, bargaining works in banks too.
• Compare and save - You can use the results from the calculator to compare the offers of different banks to get the best available deal.
• A running loan - It can even help you decide if it is really in your favour to pre-close the loan that you are already in the process of paying off, and if you decide to pay it off you will have the accrued interest amount already available to do the rest of the calculations.

In short, the accrued interest calculator is a really good tool for all your borrowing needs and can also be used for calculations of bond investments. With it you can keep track of your liabilities, which can further help you in growing strong financially.