As discussed with Pramod, a new configuration will be captured for loan products:
Pre-closure interest calculation rule: a) collect interest till pre-closure date (default - and how Mifos behaves today) b) collect interest for the full REST period (or Frequency for Recalculating Outstanding Principal) c) collect interest for complete repayment period
Option c) will not be implemented in this JIRA and will be taken up as a separate future enhancement if needed - as it will need more complicated calculations where REST period is shorter than repayment period.
For option a) - Mifos behaves as it does today - i.e. collects interest till the date of closure of the loan. For option b) - Mifos will collect full interest for the period related to "Frequency for Recalculating Outstanding Principal" - for example: for a loan Monthly repayments with weekly RESTS, it will collect full interest for a week even if the loan is being closed mid-week.
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