When you roll-over a loan you can roll-over:

• The outstanding principal of the loan

You can indicate for the product that a loan is to be rolled-over with interest. Then at the time of loan processing, you can specify that only the outstanding principal has to be rolled-over.

However, only when all the outstanding interest is paid (liquidated manually or automatically), can the loan be renewed without the interest.

• The outstanding principal and the outstanding interest together

If you have specified for the product that only the outstanding principal should be rolled-over, and you find that the outstanding interest has not been liquidated on this particular loan under process. Then you can specify through this screen that the rollover be made along with the outstanding interest.

• An amount that is different from the total of the outstanding principal and the outstanding interest. This is a special amount

The special amount is:

• Less than the outstanding principal + interest. This is because the amount by which it is less is liquidated against the interest and principal of the old loan. The remaining amount is rolled-over.
• The special amount can never be more than the outstanding principal + interest of the old loan. If it is, then you have to initiate a new loan.

Ms Yvonne Cousteau has taken a loan of USD 10,000 under the Short Term Loans for Individuals scheme:

• On 1 June 1997
• At 20% interest
• To be liquidated, at Maturity, on 31 December 1997

Since Ms Cousteau is unable to repay the loan you decide to renew the loan (roll it over).

You have two options:

• You can roll it over without interest.
• You can roll it over along with the interest.

If you roll it over without interest, the principal of the new loan has to be USD 10,000. The accrued interest on this loan is liquidated. If you roll the old loan over (renew it), along with the unpaid interest, the principal of this renewed loan is USD 1, 1167 (USD 10,000 + USD 1,167) as of 31 December 1997.