Introduction

Understanding Repayment Modes

A repayment mode is a rule that regulates how the funds transferred by the customer are allocated among their payables.

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• Repayment Steps: Funds are used to cover a specific payable

• Recalculation Steps: The rest of the payables are recalculated and allocated among the installments.

Basic Modes

Initial Payment Mode: This mode is available by default and has an only step: all the funds are used to pay the initial payment. Maximum amount available for this mode cannot exceed the initial payment.

Pay-off Mode: This mode is available by default only available to pay off the principal and all the interest and fees as of the current date and used for this purpose.

Other Modes

All other modes depend on the company, their policies and procedures. For each mode, it is possible to define:

• Name and Description of the mode: They are displayed when selecting how the payment shall be allocated. It is important that other users and customers can understand what this mode is dedicated for

• Availability: Defines if this mode can be available for customers and/or company employees - ADD DROP-DOWN OPTIONS TOPICAL FOR EACH CASE. Available options are:

  • 'No limit' (by default)

  • 'Outstanding principal'

  • 'Sum of postponed fees'

  • 'Sum of special fees'

  • 'Payoff amount'

• Max payment amount: For some modes it is important to define a repayment limit. This way you can ensure that there are no left-over funds after all the steps of the mode have been performed.

• Steps: Ordered list of repayment and recalculation steps.
  The user can easily add steps from the dropdown at the bottom of the following form. The logic of steps performance and types of steps are described further in the document.

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Logic of the Mode Steps Performance

The system performs or attempts to perform repayment and recalculation steps in the order they are placed on the list.

Repayment Steps Performance Logic

The system performs repayment steps in the order of their placement on the list until whole payment amount is used up, i.e.

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The system continues, until the repayment amount is used up and all recalculation steps are performed.

Repayment Steps List

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Repayment Steps

To understand the repayment steps, it’s important to be aware of the following terms:

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