# Loan Interest & Repayments

A collateralised loan on Real World is set for a duration selected on creation of the loan. The interest is applied at the specified APR (Annual Percentage Rate).

The interest is calculated as: Loan Amount x (Duration Days / 365) x APR



<figure><img src="https://2097916642-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FXVz3Ltib2OZzEW9SbNfA%2Fuploads%2FAeN2qFpgXISGtrbuncVt%2Fimage.png?alt=media&#x26;token=1dd6faff-8ea7-467a-b5f0-a5031434ee7b" alt=""><figcaption><p>Day 1</p></figcaption></figure>

<figure><img src="https://2097916642-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FXVz3Ltib2OZzEW9SbNfA%2Fuploads%2Fgc13NF3Eoi18LLBGIKji%2FScreenshot%20from%202024-07-31%2014-35-41.png?alt=media&#x26;token=8a0fe9c4-6bd0-4c42-8a9c-c8bcb3b05a7a" alt=""><figcaption><p>Day 2</p></figcaption></figure>

Loan repayment can be made at any point during the lifetime of the loan, and the interest will be calculated effectively to the repayment date.

Loan repayment must be made at the latest on the last day of the duration period. Otherwise if the loan duration has lapsed the loan will default and the collateral is seized.&#x20;
