Policy owners can choose the way that they want to pay their interest. There are two types of interest: interest in advance and interest in arrears. - Interest in advance: You are expected to pay for your loan in advance at a fixed interest rate. This means that you are expected to carry on your loan during that year. Therefore, even if you repay your loan during the year, you will not receive any refund on the paid interest. - Interest in arrears: You are expected to pay for your interest at the end of your policy year. In this case, your interest accumulates daily. If you pay off your loan during the year, you will not have to pay for the interest of the remaining days.