On Google India website or sap Help Portal, search for 'SAP HR progressive interest calculation in PY-IN'. I also try the same to respond to such posts.
Some info found are in the links:
https://help.sap.com/saphelp_globext607_10/helpdata/en/4a/78866e29584b6be10000000a421391/content.htm
SAP Library - XML: HCM Business Functions - No Translation Required
Loans Enhancement - India - Payroll India (PY-IN) - SAP Library
Follow through the hits, till you can find all relevant info re: what is provided by SAP and how it is to be implemented.
If there is a gap between your organization's requirements and SAP's available functionality, you may
1)discuss with other experts/consultants,
2)try to add
2.1) further enhancements using standard methods - ABAP Enhancement, badi, bapi,
2.2) any z-table for interest rates which can be read in these enhancements and maintained by user or functional consultant.
3)look for further info in internet, using user scenario examples
4)as a last resort, log an incident (previously called as OSS message) on SAP Support portal with all information that you have - including the relevant OSS Note numbers you have used, changes made, input, output - expected and actual. Follow through with SAP till the requirement or the issue is resolved.
Note: Such requirements do not get resolved without one's own research, collaboration, or effort. Every consultant has done this and will continue to do. There is no 'magic wand' to get an answer - full or partial.