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Interest Accrual
Definition
The continuous accumulation of interest charges on an outstanding loan balance.
Explanation
Interest accrues daily based on: Daily Rate = APR ÷ 365. For unsubsidized loans, accrual starts from disbursement. For subsidized loans, the government covers accrual during school and deferment.
Understanding daily accrual helps you make informed decisions about making interest payments before capitalization occurs.
Example
$100,000 unsubsidized loan at 6%: accrues $16.44/day, ~$500/month, ~$6,000/year in interest.