1. Create loan product with following datasets,
Repayment Strategy:Overdue/Due Fee/Int Principal,
Repayments:12 every 1 Months,
Interest:12 per annum (1% Per month),
Interest Calculation Period as Daily,
Interest Typeeclining Balance
Days in year:Actual
Days in month:Actual
Interest recalculation compounding on:None
Advance payments adjustment type:Reduce number of installments
Frequency for recalculate Outstanding Principalaily, every 1 day from 01 September 2015.
2. Create a client and submit new loan application on 01 September 2015, approve and disburse on same date.
3. Make early repayment on 15 September 2015.
>Interest calculated for 01 October 2015 is not proper,
> Since repayment is done on 15 September interest should get computed for 14 days for 10000, and for 01 October interest should get computed for 16 days for principal balance only.
ie Interest for 15 September 2015 > 10000*(12%/365)*14 = 46.03,
Principal due > 887.72-46.03 = 841.69,
Balance of Loan > 10000 - 841.69 = 9158.31.
Interest for 16 days should get calculated for 9158.31 only.