The amount of interest you earn on a loan is known as accrued interest. It is, however, the Sum that has yet to be collected or paid. It accrues on loans such as a mortgage, savings accounts, student loans, and other investments. We can calculate accrued interest on a loan in Excel using several methods. For your better understanding, we will use a sample data set containing the Loan amount, Yearly Interest Rate, Daily Interest Rate, and Accrued Interest Period to Calculate Accrued Interest on a Loan for method 1. For method 2, we will use the data set containing the Loan Issue Date, First Interest Date, Settlement Date, Annual Interest Rate, Par Value, Frequency or Payment Mode, Basis Days, and Calculation Method.

Sample data set for method 1.

Sample dataset for methods 2 and 3.

**Table of Contents**Expand

**3 Simple Methods to Calculate Accrued Interest on a Loan in Excel**

In this part, we will see how to calculate accrued interest on a loan in Excel manually, using the **ACCRINT** function, and the ACCRINT function along with the **DATE** function.

**Method 1: How to Calculate Accrued Interest on a Loan in Excel Manually**

Letâ€™s assume, we have a loan amount and a yearly interest rate is given. Now, we will see how to calculate accrued interest on this loan.

First, click on cell **C6 **and type the following formula.

`=C5/365`

Here, we are calculating the daily interest rate by simply dividing the yearly interest rate by the 365 number of days.

Now, press the **ENTER **key. We will get our daily interest rate as follows.

Now, we have to multiply the Loan amount, Daily Interest Rate, and Accrued Interest Period. So that, we can get Monthly accrued Interest.

At this point, click on cell **C9 **and type the following formula.

`=C4*C6*C7`

Now, press the **ENTER **key.

So, our monthly accrued interest rate for the given accrued period of 30 days and loan amount forÂ $100,000 is $821.92.

**Read More:** How to Calculate Accrued Interest on Fixed Deposit in Excel

**Method 2: How to Calculate Accrued Interest on a Loan in Excel Using ACCRINT Function**

If we look at sample dataset 2, we will see that this accrual interest method is different. In Excel, the function ACCRINT looks like the following.

`=ACCRINT(issue, first_interest, settlement, rate, par, frequency, [basis], [calc_method])`

**Issue**: This is the date when a loan or security is issued

**First_interest**: This argument means the date when the interest payment will first occur.

**Settlement**: The date when the loan will finish

**Rate**: Annual or Yearly Interest rate

**Par:**The loan amount

**Frequency**: This is the annual number of loan payments. Annual payments will have a frequency of 1; semiannual payments will have a frequency of 2, and quarterly payments will have a frequency of 4.

**Basis**: This argument is optional. This is the type of day count used to calculate the interest on a certain loan or security. The base is set to 0 if the argument is omitted. Any of the following values can be used as the basis:

0 Or Omiited- US (NASD 30/360)

1- Actual/Actual

2- Actual/360

3- Actual/365

4-European 30/360

**Calculation_method**: Itâ€™s either 0 or 1 (calculates accrued interest from the first interest date to the settlement date). This argument is also optional.

Now, jump into the method.

First, click on cell

**C13**and type the following.

`=ACCRINT(C4,C5,C6,C7,C8,C9,C10,C11)`

Now, press the **ENTER **key.

So, here we go. The amount that will be accrued is $6416.67 for 11 months from January to December.

Here, If we simply, Excel first calculates interest by Multiplying **C7** and **C8**. As a result, we are getting $7000, which is divided by 12 as the basis is 0 and we get $583.33. Finally, we are multiplying this $583.33Â with 11 months from January to December.

**Read More:** How to Calculate Accrued Interest on a Bond in Excel

**Method 3: Calculate Accrued Interest on a Loan in Excel Using ACCRINT along with Date Function**

So, what if, our Issue Date, First Interest Date, and Settlement Date, are not formatted in Date? Then we will simply use the ACCRINT function along with **the DATE function** to solve the issue.

First, click on cell **C13 **and type the following formula.

`=ACCRINT(DATE(2022,1,1),DATE(2022,4,1),DATE(2022,12,1),C7,C8,C9,C10,C11)`

Now, Press the **ENTER **key.

Thatâ€™s all. Simple. The amount that will be accrued is $6416.67 for 11 months from January to December.

For method formula explanation go to method 2.

**Read More:** How to Calculate Interest on a Loan in Excel

**Things to Remember**

We have to keep in mind certain things while doing these methods.

- The arguments for the first interest date and settlement date should be valid dates
- You have to be aware of different date systems or date interpretation settings.
- For Basis

Basis |
Day Count Basis |
Defined Year |
Year Count |
---|---|---|---|

0 | Or Omiited- US (NASD 30/360) | 360/30 | 12 |

1 | Actual/Actual | 366/30 | 12.20 |

2 | Actual/360 | 360/30 | 12 |

3 | Actual/365 | 365/30 | 12.1667 |

4 | European 30/360 | 360/30 | 12 |

**Practice Section**

The single most crucial aspect in becoming accustomed to these quick approaches is practice. As a result, Iâ€™ve attached a practice workbook where you may practice these methods.

**Download Practice Workbook**

**Conclusion**

These are three different ways to calculate accrued interest on a loan in Excel. Based on your preferences, you may choose the best alternative. Please leave them in the comments area if you have any questions or feedback.

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