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Definition
The interest accrual basis combines the accrual period (daily, monthly) with the day-count convention (actual/365, actual/360, 30/360) to determine exactly how interest is computed. Different bases produce slightly different charges for the same headline rate, which matters on large balances.
In plain terms
It is the small print behind the interest number — the same rate on a different basis is not quite the same cost.
Why it matters for your company
On sizeable facilities, check the accrual basis alongside the rate. See day-count convention and daily interest accrual.
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