The billing statement is generated 15-20 days prior to the due date. Interest bills are generated monthly or quarterly depending on the loan type.
Interest is billed from the interest paid through date to the due date.
When a payment is received it satisfies all of the interest due up to the day before the payment is received, the remaining amount is applied to the borrowers principal balance. In a case that the borrower were to have outstanding interest, the payment received would be applied to the outstanding interest then to the current interest, and if there were any remaining amount, it would be applied to the principal balance. Interest notices are generated quarterly. The interest notices are sent to notify the borrower of the interest that accrued during that quarter. The borrower has the option to pay a portion, all, or none of the notice at that time.