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#2254286 - 05/24/21 06:41 PM LOAN INTEREST
Skbanker Offline
Member
Joined: Nov 2008
Posts: 56
I am sure I will be judged for this question, but does anyone know what the rules are for renewing interest? Can you renew and/or extend interest on loans as long as you keep documentation of them?
Last edited by Skbanker; 05/24/21 06:43 PM.
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Lending Compliance
#2254296 - 05/24/21 07:53 PM Re: LOAN INTEREST Skbanker
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
I believe the term you are looking for is capitalization of interest. Any capitalization of interest would most likely be criticized by your regulators and external accountants if it was being done to hide past due status or it involved some sort of evergreen situation. A small amount of capitalization, such as the interest that has accrued since the last scheduled payment when refinancing a current loan would not raise any eyebrows.
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#2254312 - 05/24/21 09:17 PM Re: LOAN INTEREST rlcarey
Skbanker Offline
Member
Joined: Nov 2008
Posts: 56
Thank you for the information.

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#2254419 - 05/26/21 12:34 PM Re: LOAN INTEREST Skbanker
Richard Insley Offline
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Richard Insley
Joined: Oct 2000
Posts: 10,179
Toano, VA
Also, there could be a state law restricting the practice for certain types of credit or borrowers.
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