Capitalization

You can capitalize the unpaid fees or interest amounts to accrue interest on these.

Interest capitalization is a method where the interest is accrued on any unpaid interest. Interest is calculated on the principal amount and on the unpaid interest till date in case of non-payment. It is also termed as 'Interest on Interest'. If the capitalization frequency is higher, the capitalized interest grows. For example, if the capitalization frequency is weekly instead of monthly, the capitalized interest growth is higher. For more information on interest capitalization, refer to the section Loan and to setup the UI Layout, refer to the section Interest Capitalization, in CL Loan Administration Guide. 

Fee capitalization  is a method where the interest is accrued on any unpaid fee or charge.

The capitalized portion of the fee and interest amount is added to the loan balance (principal remaining + capitalized interest + capitalized fee).  Interest calculation occurs on this higher balance amount. If a capitalized charge is waived, this reduces the loan balance. However, the payment schedule is not impacted as that is created on the Principal amount of the loan.