Effective Interest rate for Loans

[Former Member]

Hi all,

I've maintained IT0045, and under conditions tab I've maintained "5% monthly interest and rate". but after running payroll, 5.1239% is coming as "Effective Interest rate" under same condition tab. How this interest rate is calculated and where is it being used, please advise.

Tomesh

[Former Member]

Hi Tomesh

follow the following steps:

Payroll India:

company Loan

1. Maintain Loan types -

2. create subtype

3. assign contry assignment/ attributes

and Condition ( Interest Rates) here u have assign the Interest rates

-

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PA30

infotype 0045

basic data:

enter Loan amount

Conditions:

enter Rate

repayment start date

repayment Amount ( monthly)

Payments:

enter first instalment date

payment type ( loan payment external)

enter 3 times

( By default system calculate rest of the calculation)

u will get enter loan repayment details

Best Wishes

Vellore Sekar

[Former Member]

It depends upon the interval of the repayment and the start date of repayment.

Assuming if the loan is offered on january and interest starts from march then the left over periods january and february interest rate is calculated and added to the interest rate.

[Former Member]

HI KK,

Thanks for reply.

But in my case the loan is offered and the interest starts on the same month.

So I think that may not be the case.

Regards,

Tomesh