As soon as the loan has been disbursed, the customer may start making payments to cover the loan and relevant fees, interest, and other charges. Each time the funds are received from the customer, they shall be allocated between different payables. The way How they are allocated depends on the chosen Repayment Mode, i.e. order of payments that the system attempts to perform with the received amount.
So, in a simplified way, if the system says the Repayment Mode A shall allocate funds to Purpose1, Purpose2, Purpose3, and Purpose 4, the system will first try to cover Purpose1 in full. If there is a leftover, it will move on to Purpose2. And so on.
It is possible to:
Create repayment modes for each credit product and define the default mode
Select repayment mode when registering a payment manuallyThere are system-wide modes that are always available
The system administrator can also create new repayment modes
When registering, charging, or making a payment, the Back-Office user or the customer can select repayment mode manually.
If the funds are charged automatically, the default mode is applied.