Compounding of Interest Clause Samples
The Compounding of Interest clause defines how interest that accrues on a principal amount is periodically added to the principal, so that future interest calculations are based on the increased total. In practice, this means that unpaid interest is regularly capitalized—such as monthly or annually—resulting in interest being charged on both the original amount and any previously accrued interest. This clause ensures that lenders are compensated for the time value of money and discourages late payments by increasing the total amount owed over time.
Compounding of Interest. Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.
Compounding of Interest. Accrued but unpaid interest will be added to the principal balance hereof annually.
Compounding of Interest. Any interest payable on any amount hereunder will be calculated daily and compounded annually.
Compounding of Interest. All references to interest payments in this Agreement, and the documents contemplated hereby, shall mean that such interest shall compound annually, unless a specific contrary provision has been set forth herein.
Compounding of Interest. Interest shall be compounded at the rate set forth above if it has not been paid one year after the day it falls due.
Compounding of Interest. The Parties agree that any current interest that remains past-due and unpaid shall be compounded as from their original due date and, without any need for legal proceedings, shall accrue new interest at a rate equal to the default interest described in 2 above. Likewise, default interest that remains unpaid shall be compounded every thirty days and, without any need for legal proceedings, shall accrue new interest at a rate equal to the default interest described in 2 above.