End-of-period interest payment is an important transaction that concerns the majority of SMEs. In general practice, companies with intensive use of revolving credit are obliged to pay interest four times a year (March, June, September, December). In some cases, end-of-period interest may also be collected monthly.
The following are the points you should pay attention to in end-of-period interest payments:
The interest amount declared by the bank must be credited to your demand deposit account on the day of the interest payment.
If you are using an overdraft account and your overdraft account covers the interest payment, you should not think that your end-of-period interest payment will be covered by your overdraft account. Because an overdraft account is also a type of loan and interest payments should never be made with the loan. Some banks may even request that your overdraft account be closed if it is in negative balance at the end of the period.
At the end of the period, collections such as account operating fee etc. are realized. For this reason, you should definitely send some more money than the interest amount declared by the bank. Unforeseen small collections may cause you to pay partial interest.
Be sure to get confirmation after sending the end-of-period interest payment balance reported by the bank, some banks make the collection manually as soon as the money arrives, while some banks wait for the end of the day and wait for the system to make automatic collection. If you are working with banks that make manual collections, you should definitely make the collection before the end of the day and check it. For banks that make automatic collection at the end of the day, you should check whether the interest is paid one day later.
If you are using a loan that will require an end-of-period interest payment on 31/12/2024 for interest payments, a 1-day interest payment will occur. It must be paid. In some cases, loans used on the last day may be skipped due to the end-of-period intensity of both the company and the bank staff, and it is seen as if the company has not made the interest payment.
You should calculate the interest yourself according to the amount of the loan utilization. Is the amount you pay only interest? Or are there other charges along with the interest? You should check the interest rate provided by the bank and the interest rate charged at the end of the period.
End-of-period interest payment is an important and important transaction that concerns a large portion of SMEs