Non-Accrual Setup Guide

Last updated: May 12, 2026

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

  • Temporary non-accrual (grace period)

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

  • Yield / OID non-accrual handling

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. Defaulted / Impaired Loan (Stop Accruing Interest)

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 using loan status flags for reporting and tracking purposes.

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.