Usance LC Interest Calculator
Calculate the exporter's discount cost and net proceeds when a usance (deferred payment) LC is discounted at sight. Reference rate + spread and acceptance commission are pro-rated on the currency's money-market convention.
Ensure your usance draft complies with UCP 600 Art. 6, 7 and 12 before presentation.
- UCP 600 + ISBP 745 rule engine
- Field-by-field variance report
- Suggested corrections per document
Days to minutes. Fill one guided form with parties, commodity, quantity, price and Incoterms - TRADEDOXPRO.COM auto-generates every document in the deal (LOI, ICPO, FCO/SCO, NCNDA, IMFPA, SPA, EUC, PI, CI, PL and 12 more). 21 bank-grade documents in one workflow, exported to PDF or DOCX in seconds.
- One form, 21 pre-contract, contract & shipping docs
- Consistent parties, quantities & Incoterms across every doc
- Cuts drafting from days to minutes - export PDF or DOCX instantly
Overview & methodology
Usance LC discounting
Under a usance LC the issuing or confirming bank commits to pay at maturity. Exporters typically discount the accepted draft to receive cash immediately at a rate of reference + spread, pro-rated on ACT/360 (USD/EUR) or ACT/365 (GBP/INR).
Frequently asked questions
How is usance LC interest calculated?
Interest = Principal × Rate × (Days / Basis). Basis is 360 for USD, EUR, AED, JPY, CHF; 365 for GBP, INR, and most Commonwealth currencies. Days are counted from acceptance (or shipment, depending on the LC wording) to maturity.
Who pays usance interest under an LC?
It depends on Field 71B and 42P/42C of the MT700. Common patterns: 'Interest for account of applicant' (importer pays; the beneficiary receives face value at maturity), 'Interest for account of beneficiary' (exporter discounts and receives net proceeds).