Does interest on a loan count towards utilization?

[folks19]

Does interest count towards the unpaid amount of a loan when calculating the percentage that has been paid back?

[iced]

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@folks19 wrote:

Does interest count towards the unpaid amount of a loan when calculating the percentage that has been paid back?

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Not unless it's been capitalized due to something like nonpayments or forebearance.

[SouthJamaica]

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@folks19 wrote:

Does interest count towards the unpaid amount of a loan when calculating the percentage that has been paid back?

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FICO utilization is based on the reported balance. If the interest has been posted and added to the reported balance, then yes it counts. If it has not posted, no.

[ccquest]

Agree with above, if it is in the reported balance then it counts. Whether it's capitalized or not shouldn't really matter I don't think. A $50000 balance + $600 interest is still $50,600 you owe and would be reported as such.

My federal student loans are the only ones I can really say anything about regarding this, and the balance is higher than origination amount due to interest and is reported as such. Currently sits at $59k principal, $4k interest and reports as $63k.

[iced]

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@ccquest wrote:
Agree with above, if it is in the reported balance then it counts. Whether it's capitalized or not shouldn't really matter I don't think. A $50000 balance + $600 interest is still $50,600 you owe and would be reported as such.

My federal student loans are the only ones I can really say anything about regarding this, and the balance is higher than origination amount due to interest and is reported as such. Currently sits at $59k principal, $4k interest and reports as $63k.

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It's saying the same thing, really. Even though student loans are about the only major loan type that formally capitalizes, any accrued compound interest that's then considered part of the principal for the purposes of calculating interest is effectively capitalized. It's just rarely done on CCs and the like because they're short-term debts.