Interest is calculated and accrued using the daily simple interest method.
To determine the amount of interest that accrues between payments, calculate the number of days between payments, then multiply the daily interest amount by this number. When a payment is received, it is first applied to any applicable late fees, next to outstanding interest, and finally to the principal balance. As the principal balance decreases, the amount of interest that accrues also decreases. Because interest accrues daily, it cannot be prepaid. If you payoff your loan early, you will not be charged for the interest that would have accrued if you paid off your loan as stated on your repayment schedule.