(a) Installment on note and other charges—(1) Direct loan accounts. For a borrower with a direct loan, the term “installation on note and other charges,” as used in this Subpart, will be the sum of the following:

1. (i) Annual installment for the year as provided in the promissory note(s).
2. (ii) Any recoverable cost charges paid for the borrower during the year. (“Recoverable costs” is defined in § 1951.10(a) of this Subpart.)

3. (2) Insured loan accounts. “Loan insurance charge” means a separate insurance charge applying to FO and SW insured loans evidenced by promissory note forms bearing a form date before January 8, 1959. For all insured loans evidenced by note forms bearing a form date of January 8, 1959, or later, the insurance charge is called “annual charge” and is included in the interest position of the annual installment in the note. For a borrower with an insured loan, the term “Installment on note and other charge” means the sum of the following:

   1. (i) Annual installment for the year as provided in the promissory note.

   2. (ii) Amounts owed the Agricultural Credit Insurance Fund. These amounts are covered by the general term “Insurance Account” and consist of the following:

      1. (A) Unpaid loan insurance charges from prior years.
      2. (B) Loan insurance charge for the current year. The loan insurance charge is computed on the basis of the amount of the unpaid principal obligation as of the installment due date and is due and payable on or before the next installment due date.
      3. (C) Any unpaid balance on advances from the insurance fund, including any recoverable cost charges paid for the borrower during the year.
      4. (D) Any accrued interest on advances from the insurance fund.
   3. (iii) The amounts owned on the insurance account must be paid by regular payments each year whether or not the note account is ahead of schedule.