Calculator Inputs
Arrears Growth Plot
Example Data Table
| Scenario | Overdue amount | Rate | Late days | Partial payment | Estimated payoff |
|---|---|---|---|---|---|
| Credit card arrears | 1,800.00 | 24% | 40 | 250.00 on day 12 | 1,635.64 |
| Personal loan arrears | 2,500.00 | 18% | 75 | 500.00 on day 30 | 2,118.69 |
| Business installment arrears | 6,200.00 | 15.5% | 95 | 1,000.00 on day 45 | 5,700.88 |
Formula Used
Simple interest = Overdue amount × Annual rate × (Effective days ÷ Day-count denominator) Compound interest = Overdue amount × (1 + Annual rate ÷ Periods per year)^(Periods elapsed) − Overdue amount Outstanding before fees = Overdue amount + Total interest − Applied payment Gross total = Outstanding before fees + Late fee + Admin fee + Tax on fees Final payoff = Gross total − (Gross total × Waiver %)This calculator assumes the partial payment is applied on the chosen day, using the selected allocation rule. Actual lender statements can differ if they capitalize unpaid interest, add tiered penalties, or apply jurisdiction-specific taxes and rounding conventions.
How to Use This Calculator
- Enter the overdue balance that is currently in arrears.
- Add the annual arrears rate and the total days overdue.
- Subtract any lender grace period by entering grace days.
- Select simple or compound interest and the compounding frequency.
- Choose a day-count basis that matches your agreement or estimate.
- Add fixed late fees, admin charges, and any tax applied to fees.
- Enter a partial payment and the day it is made, if relevant.
- Choose whether the payment reduces interest first or principal first.
- Add any waiver percentage to reflect negotiated discounts.
- Submit the form to see totals, a schedule, and the Plotly graph.
FAQs
1. What is arrears interest?
Arrears interest is the additional interest charged when a borrower misses or delays a required payment. It grows on the overdue balance for the late period, often alongside fixed fees or collection costs.
2. What changes when I switch from simple to compound?
Simple interest grows only on the overdue principal during the measured days. Compound interest can also grow on previously accrued interest, so longer delays and higher frequencies usually produce larger payoff totals.
3. Why does the day-count basis matter?
The denominator changes the fraction of a year used in the calculation. Actual/365, Actual/360, and 30/360 can produce slightly different charges even with the same principal, rate, and overdue days.
4. How do partial payments affect arrears?
A partial payment can reduce interest, principal, or both depending on your chosen allocation rule. Earlier payments usually lower the final total because less balance remains exposed to later interest accrual.
5. Should I include fixed late fees here?
Yes, when your lender adds fixed penalties or collection charges separately from interest. Enter them in the fee fields so the calculator shows a more complete estimate of the total amount needed to cure the arrears.
6. What does the waiver percentage do?
It applies a negotiated discount to the gross total after interest and fees are added. This is useful when modeling settlement offers, hardship adjustments, or internal collection concessions.
7. Can I use this for mortgages, cards, and installment loans?
Yes, for estimation. The structure fits many overdue credit products, but some lenders use tiered penalties, capitalization rules, or legal caps that require statement-specific adjustments beyond this page.
8. Does this replace my lender statement?
No. It is a planning and comparison tool. Always confirm official arrears figures, payment posting dates, taxes, and settlement terms with the lender or servicer before making final repayment decisions.