The following aspects differ between the various principles (planned principle, actual principle 1, actual principle 2):

• The posted repayment flows used for the cash flow calculation (repayment debit positions or incoming payments for repayments) - in other words, which repayment flows reduce the interest calculation capital

• The date on which the posted repayments are cleared in the cash flow (planned clearing date or payment date) - in other words, the date on which the interest calculation capital is reduced

When you create a contract, choose one of the principles on the Basic Data / Key data tab in the section headed Interest calculation capital acc. to. Your choice of principle affects how the interest calculation capital is determined for loans paid in instalments or annuities. The following principles are available:

If you use the planned principle, posted repayment receivables lead to a reduction in the interest calculation capital on the respective settlement date. The corresponding incoming payments and payment dates are not taken into account.

The following changes are made in the cash flow:

• The repayment posting (in other words, the postings for scheduled repayments) reduce the remaining balance as at the specified settlement date. The remaining balance is used as the calculation base for the condition-based repayment receivables that follow.
• The repayment receivables reduce the current interest calculation capital on the settlement date.

If you use the actual principle, the system reduces the interest calculation capital on the basis of the incoming payments for the repayments (rather than on the basis of the repayment debit positions) as at the respective settlement date. If the Immediate settlement indicator is set in the repayment condition, the payment reduces the interest calculation capital as at the actual payment date.

The following changes are made in the cash flow:

• The repayment debit positions reduce the remaining balance as at the specified calculation date.
• Only the actual incoming payments for the repayments reduce the interest calculation capital (by the payment amount). The interest calculation capital is reduced as at the payment date, which can be the planned settlement date or a later date.

If a repayment is reduced, the interest calculation capital is higher for all the periods that follow.

Even if the incoming payment is late, the annuity instalment remains constant.

If the repayment for a period has not yet been made, the interest and repayment components of the annuity instalment payment remain the same for the next period.

If the repayment portion is reduced, the interest and repayment components of the annuity repayment instalment are adjusted for the following period. The reduced instalment payment results in a higher interest charge. Since the instalment repayment remains constant, this means that the repayment portion is lower.

If the repayment is late or the repayment amount is less than planned, the annuity instalment payment changes. The increase in the interest calculation capital increases the interest charge for the next period. However, since the repayment charge corresponds to the schedule originally calculated (according to the planned principle), the instalment payment increases.

If a repayment is reduced, this only affects the instalment calculation for the subsequent period. In the periods that follow the system assumes (until the debit position is generated for the current period) that the remainder of the payment will have been made by this time. The system allows for this in the calculation by simulating an internal incoming payment for the remaining amount as at the next due date.