Which term refers to the date after which interest begins to accrue on a loan?

Which term refers to the date after which interest begins to accrue on a loan?

• A. Payment date
• B. Adjustment date
• C. Maturity date
• D. Effective date

Answer: (B)

The term that refers to the date after which interest begins to accrue on a loan is known as the adjustment date. This is a critical date in the timeline of a loan, as it marks the moment when the lender starts charging interest on the principal balance. Understanding the adjustment date is essential for borrowers, as it impacts the overall cost of borrowing and repayment schedules. In the context of the other choices, the payment date typically refers to the specific day when a borrower is required to make a payment towards the loan. The maturity date signifies when the loan term ends, and the remaining balance is due, while the effective date often relates to when the loan terms begin or become active. Each of these terms serves different purposes within loan agreements, but it is the adjustment date that uniquely indicates the start of interest accrual.

The term that refers to the date after which interest begins to accrue on a loan is known as the adjustment date. This is a critical date in the timeline of a loan, as it marks the moment when the lender starts charging interest on the principal balance. Understanding the adjustment date is essential for borrowers, as it impacts the overall cost of borrowing and repayment schedules.

In the context of the other choices, the payment date typically refers to the specific day when a borrower is required to make a payment towards the loan. The maturity date signifies when the loan term ends, and the remaining balance is due, while the effective date often relates to when the loan terms begin or become active. Each of these terms serves different purposes within loan agreements, but it is the adjustment date that uniquely indicates the start of interest accrual.