What is pre-paid interest in SAP FS-CML - Loans Management?

SAP Term: pre-paid interest

• Component: FS-CML

• Component Name: Loans Management

• Description: The total interest in the life cycle of a contract collected on the date that the loan is disbursed.

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• Key Concepts: 
  Pre-paid interest is a payment made by a borrower to a lender before the loan is due. This payment is usually made at the beginning of the loan period and is used to cover the interest that will be due on the loan over the course of its term. In SAP FS-CML Loans Management, pre-paid interest is recorded in the system and tracked as part of the loan's repayment schedule. 
  
  How to use it: 
  In SAP FS-CML Loans Management, pre-paid interest can be recorded and tracked by entering the amount of pre-paid interest in the system. This amount will then be included in the loan's repayment schedule and will be taken into account when calculating the total amount due on the loan. 
  
  Tips & Tricks: 
  When entering pre-paid interest into SAP FS-CML Loans Management, it is important to ensure that the amount entered is accurate. This will ensure that the repayment schedule is accurate and that all payments are accounted for. 
  
  Related Information: 
  For more information on pre-paid interest and how it is used in SAP FS-CML Loans Management, please refer to the official SAP documentation.