What is interest suspension in SAP FS-CML - Loans Management?

SAP Term: interest suspension

• Component: FS-CML

• Component Name: Loans Management

• Description: A process used by financial institutions in Hungary in which interests or interest-type revenues from the customer’s transactions are suspended during the year or at the end of the year in case specific conditions regarding the time of settlement overdue or not paid till a given time and classification of the transaction qualified or non-qualified apply. In case the conditions for suspension apply, the relevant items must not be included in the balance sheet or income statement and must be posted on off-balance accounts.

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• Key Concepts: 
  Interest suspension is a feature of the FS-CML Loans Management component of SAP. It allows users to temporarily suspend the accrual of interest on a loan, which can be useful in cases where the borrower is unable to make payments due to financial hardship. The interest suspension period can be set for a specific duration, and the interest will resume accruing once the period has ended. 
  
  How to use it: 
  To use the interest suspension feature, users must first create a loan in the FS-CML Loans Management component. Once the loan is created, users can select the “Interest Suspension” option from the menu. This will open a window where users can enter the duration of the interest suspension period. Once this is done, the interest will be suspended for that period and will resume accruing once it has ended. 
  
  Tips & Tricks: 
  It is important to note that interest suspension does not reduce or eliminate any existing debt. It simply pauses the accrual of interest during the specified period. Additionally, users should be aware that any unpaid interest during the suspension period will still need to be paid once it resumes. 
  
  Related Information: 
  For more information on using the interest suspension feature in FS-CML Loans Management, please refer to SAP’s official documentation here: https://help.sap.com/viewer/product/FS-CML_LOANS_MANAGEMENT/latest/en-US