Dictionary of Banking Terms: odd days interest
odd days interest
interest earned in a mortgage or closed-end installment loan during a time interval that is either longer or shorter than other loan payment periods. This normally occurs when a bank funds a mortgage loan in the middle of a month, or when a dealer sells installment credit contracts to a bank, and the bank assumes responsibility for collecting the debt. For accounting purposes, the extra days' interest is added to the first loan payment. If the loan is a fixed payment, fully amortizing loan, all remaining loan installments are even amount payments.
