Add-On Interest
Add-on interest calculates borrowing cost on the original principal rather than the declining balance, raising effective cost.
Add-On, Balance, and Precomputed Interest terms for origination, underwriting, administration, refinancing, bridge financing, leases, authorizations, and servicing risk.
Add-On, Balance, and Precomputed Interest terms explain loan origination, underwriting, servicing, administration, refinancing, bridge and gap financing, leases, authorizations, and legal-risk controls.
Use this branch when loan administration, servicing transfer, authorization, refinancing, lease financing, bridge funding, or borrower documentation changes risk or cash-flow timing.
| Term | Use it for |
|---|---|
| Add-On Interest | Origination, underwriting, servicing, administration, refinancing, bridge, gap, lease, authorization, borrower, or legal-risk term. |
| Adjusted Balance Method | Origination, underwriting, servicing, administration, refinancing, bridge, gap, lease, authorization, borrower, or legal-risk term. |
| Annualized Percentage Rate of Interest | Origination, underwriting, servicing, administration, refinancing, bridge, gap, lease, authorization, borrower, or legal-risk term. |
| Precomputed Interest | Origination, underwriting, servicing, administration, refinancing, bridge, gap, lease, authorization, borrower, or legal-risk term. |
Check the origination file, underwriting approval, servicing record, payment history, escrow or reserve record, refinancing terms, lease agreement, authorization record, transfer notice, and applicable legal constraints.
Servicing, refinancing, and lease-financing terms depend on contracts and law; this page is educational, not legal or credit advice.
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Add-on interest calculates borrowing cost on the original principal rather than the declining balance, raising effective cost.
The Adjusted Balance Method is a technique used by credit card companies to calculate the interest charged on an outstanding balance.
Annualized percentage rate of interest expresses borrowing cost as a yearly rate so loan offers can be compared.
Precomputed interest refers to the total interest calculated at the beginning of a loan and included in the scheduled payments.