Odd-Days Interest
Categories: Credit, Ethics/Morals
You have a hard time paying attention to your spouse. After 10 years, you just don’t wanna listen anymore. To be fair, they feel the same way about you. It makes communication difficult. So you make a deal. You’ll listen to them on dates that are odd. They will listen on days that are even. You're giving odd-days interest.
Actually, the term applies to loans. It refers to interest earned on loan periods that don't fall into the prearranged payment structure. Usually, it comes up when monthly payments need to be prorated for some reason.
You have a mortgage that will have a $5,000-a-month payment. However, before you can close the deal, the seller disappears into a wormhole that opens up in the basement of your soon-to-be new home. (You knew about the wormhole when you started the escrow process. The realtor sold you on it as a feature.)
The deal was going to close on the 1st. However, they don't re-emerge until the 15th of the month, crawling out of the wormhole aged 25 years and covered with a thin, sticky film. Between their babbling about the war they have been fighting with the pod people from the other dimension, you get them to sign the documents allowing you to buy the house.
Now you've got a half-month's payment due: $2,500, covering the 15th until the 30th of the month. Odd-days interest.
