Loan can be saved with two types of interest rates.
1) Fixed rates:
Fixed rates are for those loans that have fixed interest rates throughout the period. To create fixed loans, you have to check Fixed interest button. You can than see Fixed base rate % and Spread %. By updating those you can automatically get interest rate % that will be automatically used to calculate interest throughout the period.
2) Floating rates:
Floating rates are a bit different than fixed rates interest calculation. If you want to make loan as floating rates, you must first choose floating base rate reference rates. Those are list In reference rates register. You should also choose default spread rate %.
After you insert those and create a loan, you should see tab below for interest rates. There you can create and update floating rates.
Once you create the interest rate, you should see it in interest rate tab.
Automate interest:
For automate interest, once the rate for that period has been updated. Like the first rate is made in Jan-1 and reference rates of 1M, the automate interest runs on Feb 1. If the system finds the mm rate for Feb 1. It will update interest rate for that loan on Feb 1. It will take default spread rate from the loan on this case.
If the interest rate is not found on that date while updating, it will give the warning that the interest rate is not found. In this case, it will update the rate the once it is provided in the system.
The interest will be updated in the loan once the rate is provided automatically or manually.