Interest anomalies this w/e ie 17/10/15 & 18/10/15

There is no loan #161 ... I assume you meant #146

(Pure guess) some of the interest / capital repayments are not credited on the date due but a day or 2 later (weekends etc) ... could it be that you have observed the system correctling for the over accrual of interest between the due repayment date (against which the capital reduction will have been applied) and the actual repayment date ?  In the case of #146 this would imply the funds had been received by AC before Friday.

Interest is worked out according to the repayment schedule as listed on the site.  If that ever becomes out of date or ends because the repayment plan has ended, even if the borrower has not made those repayments, then interest stops accruing.  So when a loan overruns no additional interest will accrue until the admin team enter in additional information into the repayment schedule to reflect any interest that is accruing.  This was deemed preferable to the system assuming interest would accrue and then having to cancel that at a later date, for instance if the borrower makes the payment within the grace period.  If the repayment schedule is ever wrong or is changed that will have a knock on effect on the accrued interest until it is corrected by the admin team.

Accrued interest is worked out afresh each day - it's not a number that accumulates a little bit each day, it's worked out as a percentage of the payment due for the repayment period we're currently in.  Interest is also recalculated from scratch at the point the payment is made rather than looking at the accrued interest figure, so there's always that manual double check that the payment amount is correct at the point it's paid.

Interest is also calculated based on holdings at each midnight, so the interest accrued from Friday to Saturday where a capital repayment had been made on the Friday would be on the reduced balance.  Depending on when repayment dates fall you can also see some variation between loans.  For instance if they have no monthly repayments and are accruing across months vs a monthly repayment loan.  Interest is calculated for the period based on x% per month not x% per day, so actual daily interest will vary depending on the number of days in the month.  Accrued interest is allocated based on a simple percentage of the way through the repayment period so if you have x% per month on a 6 month repayment period each day may be 100/184% of the total due for that period, whereas a x% per month on a monthly repayment schedule may be accumulating at 100/30% of the total due for that month.  ((x / 12) * 6 * 100) / 184 != ((x / 12) * 100) / 30

Calculating interest in this way means that the repayments each month are identical, rather than varying, which is easier to administer and to ask borrowers to set up via standing order.

If you have any specific queries then please could I ask you to direct them to our lender team?  They'll be happy to take your phone all or email and can then discuss the specifics and refer them to our credit team to check the figures.  Should they find a discrepancy they can then give me the specifics to investigate and fix in the system.

You are absolutely correct, I did quickly read b4 posting but I didn't check the loan nos......5 minutes on the naughty step OK?

The principal was reduced in my account on the Friday, on the Saturday the hiccup occurred. No problems with interest on the Thursday, today as I stated the interest was very slightly higher than expected..... may be as the month goes this will continue to correct the underpayment.

Actually tell a lie.  I've found an issue that will affect another class of loan but it doesn't appear to affect #84.  Can you PM me your email address so that I can look into the specifics of your account / holding please.

Someone called?

I can't say that I noticed anything wrong with the above loans over the last couple of days. The large repayment chunk on 146 may have masked an error that I missed, due to principal changing by a lot.

Loan 66 seems ok, and loan 84 hasn't moved in ages due to me having no holding (but still owed interest).

On the effect you note for loan 84, it used to happen annoyingly often that correctly accrued interest would un-accrue. This is because the accrued interest is calculated from first principles, all the way back to the start of the loan, taking into account everything that ever happened. Sometimes, people go in and tweak "what happened" in terms of dates, amounts, rate applied, and it shows up like that. I don't think that's a good idea, as it allows revisionism of the figures without any visible statement entry, or other indication, which is why I distrust and check the figures. Not surprised to find that others are doing the same.

On the secondary effect of loan 84 (comms) -- also not surprised. On the "official channels" sometimes things are dealt with internally without thanks/acknowledgement of an actual problem. Other times they are just lost/ignored. Which is why chris gets prodded on here instead

Interest is calculated monthly as with most other platforms and banks for term loans, rather than daily.  Accrued interest is for display purposes only, it's a lender convenience function and isn't used anywhere else.  This is calculated as a simple percentage of the way through the repayment period.

There isn't a simpler solution.

There is a simpler solution - the one most other platforms I'm aware of use (including regulated exchanges such as the bonds market on the London Stock Exchange) - that any accrued interest becomes the property of the buyer, and the price agreed between buyer and seller (whether determined by the platform, or by negotiation between the buyer and seller) reflects this.

This way, the accrued interest due to any given lender can be calculated solely on the basis of that lender's holdings at that precise moment, with no reference to historic sales and purchases during the accrual period. It also allows those who wish to exit the platform completely to do so without needing to withdraw dribs and drabs of interest... only when entire loans are blocked from sale would a lender who sells out completely even need to come back to the platform at all!

The "seller keeps accrued interest" mechanism certainly seems a smart solution to the pricing function of loan parts, which can then focus solely on the value of the capital. However, the huge complexity around the AC interest accrual calculation seems to me a direct result of this decision to treat "capital" and "accrued interest" completely separately on the secondary market, allowing one to be sold and blocking sales of the other completely. Instead of just multiplying the total accrued interest on the borrower loan by the proportion of the loan currently held, this then results in AC having to analyse all past sales and purchases in order to discover exactly how long that specific lender has held units of the loan over the entire interest accrual period.