EL-8688 - Getting issue details... STATUS
Repayment Date: Date when the payment was done.
Introduction
Understanding Repayment Modes
A repayment mode is a rule that regulates how the funds transferred by the customer are allocated among their payables.
In simple terms, it is an ordered list of steps applied to the payment.
There are two types of steps:
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 back-office users (company employees) - ADD DROP-DOWN OPTIONS TOPICAL FOR EACH CASE
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.
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.
The system tries to cover the amount required for step.
If the amount is not enough to cover the step in full, it covers it in part and moves on to perform the remaining recalculation steps in the corresponding order. It does not perform any other repayment steps.
If the amount is enough to cover the steps in full, the system covers the step, and
If the next step is a repayment step, the system tries to perform it (as in 1)
If the next step is a recalculation step, the system performs it
The system continues, until the repayment amount is used up and all recalculation steps are performed.
Repayment Steps List
Repayment Steps
To understand the repayment steps, it’s important to be aware of the following terms:
Repayment Date: Date on which the transaction has been made (via a payment system) or date with which the transaction has been registered in the system manually.
Due Date: The day on which the installment has to be paid-off in compliance with the payment schedule for the loan.
I’d suggest then adding such sections:
Early repayments
On due-date repayments
Delayed repayments
Recalculation
Early repayments
If an early repayment step has been selected, it will be applied only if the Repayment Date precedes the Due
CurrentDebtStep → Current installment
Info text: Use the available amount to cover the fees, interest and then (if possible) the principal of the instalment that has started and has not finished before or on the Repayment Date
CurrentRecalculateStep → move to Recalculation Steps
EarlyPayCurrentDebtStep → Current fees and interest
Info text: Use the available amount to cover the fees and interest due for the instalment that has started and has not finished before or on the Repayment Date
ExtraOverpaymentStep → Future principal
Info Text: Use the available amount to cover the current installment and then (if possible) cover the remaining principal of the loan in part or in full.
FutureDebtStep → Future installments
Use the available amount to cover upcoming installments starting with the next one. (The fees and interest and then, if possible, the principal of the nearest installment, then of the next installment after next, etc.)
FutureDebtReversedStep → Future installments reverse
Use the available amount to cover upcoming installments starting with the last one. (The fees and interest and then, if possible, the principal of the last scheduled installment, then of the one before last, etc.)
InitialPaymentStep → Initial payment
Use the available amount to cover all and any fees accrued before the start of the first installment.
PastDueDebtStep → Past installments
Use the available amount to cover the fees, interest and then (if possible) the principal owed on the Repayment Date ??? ВОПРОС - do we first pay the fees, interest and principal of the most overdue installments, then of the next one, etc. Or do we cover all the fees due, then all the interest due and then all the principal due on the Repayment Date?
Cover the overdue payments missed in the past starting with the fees.
Use the available amount to cover
suggested description: Available repayment amount is used to pay off the debt that is owed on the Repayment Date.
RemainingCurrentPrincipalStep
suggested screen name: Current Installment Principal
suggested description: Available repayment amount is used to pay off the principal due for the installment actual for the Repayment Date
suggested info text: Amount payable for the installment that has started and has not finished before or on the Repayment Date
PayOverpaymentStep - ???
RECALCULATION AND BALANCING
CurrentRecalculateStep
suggested screen name: Recalculate Installment
suggested description: Recalculate fees and interest for the installment
suggested info text: Apply the step after Current Installment Principal or Current Installment Full to recalculate outstanding fees and payments for the installment. Don't add the step to keep the initial payment schedule.
RemainingRecalculateStep
suggested screen name: Recalculate Loan
suggested description: Recalculate the loan schedule
suggested info text: Apply the step to recalculate the loan schedule if the repayment amount was used for any early payments.
Options:
suggested selector info text: Decide how the payment schedule shall be updated if the total due amount is changed.
Option 1
Current name: Keep initial value
Suggested name: Reduce number of payments
Suggested hint: Installment amounts stay the same, but their number is reduced to match the new amount.
Option 2
Current name: Recalculate always
Suggested name: Reduce payments
Suggested hint: Loan payment schedule stays the same
Availability
Hint: If you choose Back – only your staff can log repayments. If you choose Front – borrowers can do it themselves.
Steps hint: Prioritize or remove steps of the repayment mode in a way that reflects the order in which you’d like to cover what is owed to you including all the fees, interest, and principal of the loan.
Cover the overdue payments missed in the past starting with the fees.
Current principal early payment
Covers the principal debt accrued as of the repayment time in the current installment.
Recalculate current installment
Recalculates the sum owed within the current installment. This affects the fees and interest to be accrued as they are based on the reduced principal.
Remaining recalculate step
Recalculates all future installments if there has been an overpayment which reduced the principal.
Future debt
Future debt reversed
Covers upcoming installments starting with the last one without recalculating the schedule.
Payoff
Standard payoff of the whole loan.
Special fees
Covers all the accrued special fees in the specified order.
Postponed fees
Covers all the postponed fees in the specified order.