Simple Interest Advances Sample Clauses
The Simple Interest Advances clause defines how interest is calculated on loan advances using the simple interest method. Under this clause, interest accrues only on the principal amount outstanding, without compounding, and is typically calculated daily or monthly based on the actual number of days elapsed. This approach provides transparency and predictability for both lender and borrower, as it ensures that interest charges remain straightforward and do not escalate due to compounding, thereby simplifying repayment calculations and reducing the risk of misunderstandings.
Simple Interest Advances. (i) Advance by Servicer for early payment on Simple Interest Receivables. As of the close of business on the last day of each Collection Period, the Servicer will advance an amount equal to the amount of interest due on the Simple Interest Receivables at their respective APRs for the related Collection Period (assuming the Simple Interest Receivables pay on their respective due dates) minus the amount of interest actually received on the Simple Interest Receivables during the related Collection Period (such amount, a "Simple Interest Advance"). The Servicer will be entitled to recoup this Simple Interest Advance to the extent that subsequent payments of interest on any Simple Interest Receivables received in any Collection Period exceed one month's interest on the Simple Interest Receivable and will be entitled to all payments of interest in excess of one month's interest.
(ii) Advance by Servicer for non-payment on Simple Interest Receivables. The Servicer will make a Simple Interest Advance on a Simple Interest Receivable for which no payment was received as of the close of business on the last day of each Collection Period to the extent that the Servicer, in its sole discretion, determines that the Simple Interest Advance will be recoverable from subsequent collections from the related obligor or any related Liquidation Proceeds. If the Servicer subsequently determines that such Simple Interest Advance will be not be recoverable from these sources, the Servicer will be entitled to recoup the Simple Interest Advance from any collections made on the other Receivables in the Trust.
Simple Interest Advances. On each Determination Date, the Servicer shall determine the amount, if any, of any Simple Interest Shortfall or Simple Interest Excess for the related Collection Period. If the Servicer determines that there is a Simple Interest Shortfall for such related Collection Period, the Servicer shall make an advance (a "Simple Interest Advance") in the amount of such Simple Interest Shortfall and deposit such Simple Interest Advance into the Collection Account on or before the Business Day immediately preceding the next succeeding Distribution Date. If, however, the Servicer determines that there is a Simple Interest Excess for such Collection Period, the Trustee shall withdraw the amount of such Simple Interest Excess from the Collection Account on the next Distribution Date and pay the amount of such Simple Interest Excess to the Servicer as additional servicing compensation. Notwithstanding the immediately preceding sentence, to the extent that the aggregate amount of Simple Interest Advances made by the Servicer with respect to all prior Collection Periods does not exceed the aggregate amount of all Simple Interest Excesses with respect to such prior Collection Periods, such excess shall be deposited pursuant to Section 4.6(b) into the Spread Account and shall be treated as a contribution to the Spread Account by the Servicer for the benefit of the Holder of the Excess Cash Flow Certificate for federal income tax purposes.
Simple Interest Advances. The Servicer shall not make any advance in respect of principal of Simple Interest Receivables. If the Servicer shall determine that an Outstanding Simple Interest Advance with respect to any Simple Interest Receivable shall not be recoverable, the Servicer shall be reimbursed from any collections made on other Receivables in the Trust, but only to the extent that such Outstanding Simple Interest Advance represents accrued and unpaid interest on such Simple Interest Receivable. Outstanding Simple Interest Advances with respect to such Simple Interest Receivable shall be reduced by the amount of such reimbursement.
(c) In the event that an Obligor shall prepay a Receivable in full, if the related contract did not require such Obligor to pay a full month's interest, for the month of prepayment, at the APR, the Servicer shall make an unreimbursable advance of the amount of such interest.