Interest accrual

Interest accrues from activation—the posted value date of the disbursement, not the moment someone clicked “fund”—under the contract’s calculation settings. Those settings are resolved from the product at origination and frozen on the loan, so a later product edit never changes what an existing contract accrues.

The contract’s calculation settings

The product’s native block pins the choices that must not drift between schedule preview and servicing: the interest rate per period and its frequency, the declining-balance interest type, the interest-calculation period, equal-installment amortization, and a progressive schedule. Day-count conventions—the days-in-month and days-in-year treatment used to turn a rate into a period’s interest—are product configuration in the same block, and the finalized APR disclosure retains the unit-period, day-count, and fractional-period conventions it used.

For Harbor’s regular-period illustration—$8,400.00 at 13.25% with monthly installments:

opening principal        $8,400.00
annual rate                 13.25%
$8,400.00 × 13.25% ÷ 12     $92.75

Progressive schedules recalculate after dated transactions and schedule modifications while preserving posted history, so the accrued position always follows the actual balance path rather than the original projection.

Accrual versus cash

Accrual is recognition, not money movement. An interest accrual recognizes interest receivable and income under the product’s accounting policy, written as balanced, value-dated journal entries with their source transaction attached. Cash arrives separately: a posted payment clears cash and reduces components in allocation order—Harbor’s first $517.14 payment allocates $92.75 to interest and $424.39 to principal. The accounting guide traces both event families entry by entry.

Backdating is controlled: a value-dated posting reprocesses dependent allocation and accrual deterministically and creates explicit adjustment entries—posted lines are never edited.

Reading accrued interest

GET /v1/loans/{loanId}?associations=repaymentSchedule,transactions shows interest accrued, paid, waived, and outstanding; the loan summary’s payoff block projects interestAccruedToDate through the good-through date under the contract’s calculation settings, business calendar, and rounding policy.

Paused accrual

An interest pause is an effective-dated interval on the loan: eligible days inside it do not accrue contractual interest, while principal, payments, and prior accrual history are preserved. Any avoided-interest figure estimated before the interval ends is a projection; the final amount is derived from the actual balance path when the interval completes. A pause does not stop fees, penalties, autopay, statements, or delinquency—those need their own explicit controls.

How waivers post

Forgiving interest is a governed transaction, not a balance edit:

• Waive accrued interest (waiveinterest) forgives a defined amount of eligible accrued, outstanding interest—future, unaccrued interest is out of scope.
• Waive an interest payment (interestPaymentWaiver) targets the interest component of one scheduled obligation while preserving the installment and its principal.

Both post non-cash transactions with component allocation: accounting debits the configured interest-waiver or concession account and credits interest receivable or income according to the product’s accounting method. Human calls carry the case header when case management is enabled, maker-checker can park the command for a second approver, and every execution writes a governance record. There is no undo command—an erroneous waiver is corrected by a new governed action agreed in the case.