What is 'commitment interest' in SAP FS-CML - Loans Management?

commitment interest - Overview

• Component: FS-CML

• Component Name: Loans Management

• Description: The interest levied on the unutilized amount of a loan.

commitment interest - Details

• 
  Key Concepts: 
  Commitment interest is a type of interest charged by a lender when a loan is approved but not yet disbursed. It is calculated on the amount of the loan that has been approved but not yet disbursed. The interest rate is usually higher than the rate for the loan itself. 
  
  How to use it: 
  In SAP FS-CML Loans Management, commitment interest can be calculated and tracked using the Commitment Interest Calculation (CIC) function. This function allows users to define the interest rate, calculate the commitment interest, and track the amount of commitment interest that has been paid. 
  
  Tips & Tricks: 
  When calculating commitment interest, it is important to ensure that the correct interest rate is used. The rate should be based on the terms of the loan agreement and should be updated regularly to reflect any changes in market conditions. 
  
  Related Information: 
  For more information on commitment interest and how to use it in SAP FS-CML Loans Management, please refer to the SAP Help documentation.