Non-Accrual/Defaulted Loan Setup Guide

Last updated: October 12, 2026

This guide explains how to configure non-accrual periods in Hypercore, depending on your use case:

  • Temporary non-accrual (grace period)

  • Stop interest accrual from a specific date (Defaulted or impaired loans)

  • Yield / OID non-accrual handling

  • Marking a loan as Defaulted (flag for tracking — NEW)

1. Temporary Non-Accrual (Grace Period)

Use this option when you want to temporarily stop principal and/or interest accrual for a defined period.

Step-by-Step

Navigate to Loan Terms

  1. Go to the Loan Page

  2. Click the Terms tab

  3. Click ➕ Add Terms

Set Up Grace Period

  1. Set the Terms Update Date to the date the non-accrual should begin

  2. Locate Principal Grace Period:

    1. Enter the start and end dates

  3. For interest non-accrual, locate Interest Grace Period

    1. Enter the relevant dates

Save & Validate

  1. Click Save

  2. Review the Loan Schedule to confirm accrual is paused during the selected period

💡Important Notes: During a grace period no principal accrues and no interest accrues.
After the grace period ends, accrual resumes automatically based on the original terms.

2. Stop Accruing Interest (Defaulted / Impaired Loan)

Use this method when a loan is in default or impairment and should stop accruing interest permanently (or until further notice).

Step-by-Step

Navigate to Rate Updates

  1. Go to the Loan Page

  2. Open the Terms panel (right side)

  3. Click Update Loan Terms → Rates Update
    (or “New Loan Terms” if required)

Configure 0% Rate

  1. Set the Effective Date for when non-accrual should begin

  2. In the Rate Updates grid, set:

    1. Interest Rate = 0%

    2. If applicable, adjust:

      1. Margin

      2. Min Rate

      3. Max Rate
        (to ensure they do not override the 0% rate)

Save & Validate

  1. Click Save

  2. Review the Schedule to confirm interest stops accruing from that date

Optional: You may also mark the loan as Defaulted for tracking and reporting - see Section 4. This changes the Life Cycle only and does not stop accrual by itself.

Important Notes: This approach
A. preserves historical interest rates
B. keeps a full audit trail
C. Is fully reversible with a future rate update

3. Non-Accrual – Yield / OID Handling

If the loan includes OID / EIR (Effective Interest Rate):

Required Configuration:

Make sure to also define the non-accrual period inside the OID Settings of the same loan terms update.

Otherwise:

The system may stop cash interest, but still continue yield amortization in reports

This ensure both cash interest and yield recognition are aligned.

4. Marking a Loan as Defaulted

Use this when you want to visibly flag a loan as defaulted for tracking and reporting — without changing its terms or schedule.

This is a manual setting you control. It sets the loan's Life Cycle to Defaulted, shows red Defaulted indicators, and lets you filter defaulted loans in the Loans list.

It does NOT stop interest accrual. To stop accrual, also use Section 2 (0% Rate Update).

Where you see it

  • Loan Page header: red Defaulted (X days) tag.

  • Loan Page Lifecycle card: Defaulted / Default resolved entries in the timeline, including notes.

  • Loans list: red Defaulted value in the Life Cycle column.

  • Filter: Loans → Filters → Life Cycle → Defaulted.

How to mark defaulted/resolve

  1. Go to the Loan Page.

  2. Click Mark as Defaulted in the top bar (appears for Active loans with overdue), set Defaulted On + reason, then Submit.

    Or Actions (top-right) → Configuration (⚙) → Edit Default Events.

  1. To resolve, click Default Resolved in the top bar, set the resolved date + note, then Submit.

How to view/edit history via Actions

  1. Go to the Loan Page → Actions (top-right) → Configuration (⚙) → Edit Default Events.

  2. Here you can add past periods, fix dates/notes, or add a new period. Only the last period can stay open (no resolved date), and periods cannot overlap.

  3. Click Submit and confirm.