diff --git a/fineract-progressive-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/ProgressiveLoanScheduleGenerator.java b/fineract-progressive-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/ProgressiveLoanScheduleGenerator.java
index e28da69967f..c56db656baf 100644
--- a/fineract-progressive-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/ProgressiveLoanScheduleGenerator.java
+++ b/fineract-progressive-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/ProgressiveLoanScheduleGenerator.java
@@ -264,10 +264,10 @@ public OutstandingAmountsDTO calculatePrepaymentAmount(MonetaryCurrency currency
                 log.debug("calculating prepayment amount till rest frequency date (Strategy B)");
                 OutstandingAmountsDTO outstandingAmounts = new OutstandingAmountsDTO(currency);
                 loan.getRepaymentScheduleInstallments().forEach(installment -> {
-                    boolean isPayoffAfterInstallmentFrom = installment.getFromDate().isAfter(onDate);
+                    boolean isPayoffBeforeInstallment = installment.getFromDate().isBefore(onDate);
 
                     outstandingAmounts.plusPrincipal(installment.getPrincipalOutstanding(currency));
-                    if (!isPayoffAfterInstallmentFrom) {
+                    if (isPayoffBeforeInstallment) {
                         outstandingAmounts.plusInterest(installment.getInterestOutstanding(currency));
                     } else {
                         log.debug("Payoff after installment {}, not counting interest", installment.getDueDate());
diff --git a/fineract-progressive-loan/src/test/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/ProgressiveLoanScheduleGeneratorTest.java b/fineract-progressive-loan/src/test/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/ProgressiveLoanScheduleGeneratorTest.java
index 9da9156b15a..214bff051c9 100644
--- a/fineract-progressive-loan/src/test/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/ProgressiveLoanScheduleGeneratorTest.java
+++ b/fineract-progressive-loan/src/test/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/ProgressiveLoanScheduleGeneratorTest.java
@@ -136,7 +136,7 @@ public void calculatePrepaymentAmount_TILL_REST_FREQUENCY_DATE() {
     }
 
     @Test
-    public void calculateSameDayPayoff() {
+    public void calculateSameDayPayoff_TILL_PRE_CLOSURE_DATE() {
         LoanApplicationTerms terms = mock(LoanApplicationTerms.class);
         when(terms.getPreClosureInterestCalculationStrategy()).thenReturn(TILL_PRE_CLOSURE_DATE);
 
@@ -151,6 +151,22 @@ public void calculateSameDayPayoff() {
         assertEquals(BigDecimal.valueOf(200.0).longValue(), amounts.getTotalOutstanding().getAmount().longValue());
     }
 
+    @Test
+    public void calculateSameDayPayoff_TILL_REST_FREQUENCY_DATE() {
+        LoanApplicationTerms terms = mock(LoanApplicationTerms.class);
+        when(terms.getPreClosureInterestCalculationStrategy()).thenReturn(TILL_REST_FREQUENCY_DATE);
+
+        Loan loan = prepareLoanWithInstallments(List.of(
+                new TestRow(LocalDate.of(2024, 1, 1), LocalDate.of(2024, 2, 1), BigDecimal.valueOf(102), BigDecimal.valueOf(100),
+                        BigDecimal.valueOf(2), ZERO, ZERO, false),
+                new TestRow(LocalDate.of(2024, 2, 1), LocalDate.of(2024, 3, 1), BigDecimal.valueOf(102), BigDecimal.valueOf(100),
+                        BigDecimal.valueOf(2), ZERO, ZERO, false)));
+
+        OutstandingAmountsDTO amounts = generator.calculatePrepaymentAmount(usd, LocalDate.of(2024, 1, 1), terms, MathContext.DECIMAL32,
+                loan, holidays, processor);
+        assertEquals(BigDecimal.valueOf(200.0).longValue(), amounts.getTotalOutstanding().getAmount().longValue());
+    }
+
     @NotNull
     private Loan prepareLoanWithInstallments(List<TestRow> rows) {
         Loan loan = mock(Loan.class);