Calculations engine overview
TurnKey Lender’s Calculations Engine is the only solution on the market that allows for the creation of credit products of any complexity in a matter or minutes or even seconds.
Example:
Even if you need a credit product with a 12-day grace period, 1% interest added every other week, 2% fee every 20 days, $35 fee once a repayment period, a custom accrual priority (principal first, then fees and interest), a custom repayment priority (interest, principal, fees), overpayments close installments from the last one back to the nearest one, flexible repayment periods (from 18 days to 4 months) and flexible loan term (from 45 days to 5 years).
TurnKey Lender Calculations Engine covers that. The whole setup process takes a minute or less. Similar changes take lenders with hard-coded systems months.
TurnKey Lender v7.x allows lenders to create custom credit products of any complexity without any involvement from the development team. This leads to increased business agility, costs saving, and reduced human error.
No product in the industry can compete with the TurnKey Lender Calculations Engine. We are proud of this solution and of the customization capacity, it provides lenders with.
No matter the needs of the lender (be it a bank, an alternative lender, a retailer, or a revolutionary startup), Calculations Engine can easily create credit products that address them specifically. This is achieved with help of numerous calculation approaches that come built-in the solution.
Once published, credit products can be used by borrowers instantly and you can always stay on top of the situation to help your community and grow your business.
As a lender, you are protected against any regulatory changes and market pivots that the economy may throw your way because you can fully adjust all your credit products and roll out the ones that address the need almost instantly.
Loan calculation types
TurnKey Lender customers work in all kinds of business verticals and offer numerous different credit products to their clients. From release to release, our team makes sure that all of their crediting needs are met and automated. And to address the specific need for flexible credit products management, we’ve enhanced the list of pre-configured credit products in Light mode with three new loan types:
Classic implies a decreasing installment monthly payment due to a gradually reduced interest
Bullet is based on the payment of Principal in the last installment
Flat interest stays the same throughout the loan tenure
The templates for all most common loan types are built-in.
All other possible loan types can be configured in the Advanced mode which can be accessed from each credit product’s editing screen.
Credit lines
By popular demand, TurnKey Lender credit products set has been updated to include full-fledged credit lines functionality which supports multiple disbursements within the same loan application.
After each next disbursement, the System automatically recalculates the repayment schedule and installment amounts based on the credit product settings.
The initial repayment schedule is based on the first funds tranche made within the loan. Credit line limit can be adjusted without creating new loan applications.
Credit lines in TurnKey Lender support revolving credit which enables lenders to build lasting business relations with borrowers keeping all the relevant data in a single place without multiplying loan applications. Embedding lending into your business, you can offer lines of credit for borrowers to use continuously within the loan terms you have agreed upon.
To accommodate the needs of business and consumer lenders who extend credit for their products and services, flexible down payments can also be used with credit lines. As a lender, you can set the acceptable range of down payment for each credit product, the borrower will select the value that works best for them and the System will instantly recalculate the installments and schedule.
The notifications and disbursement fees that apply to credit lines have also been added to the System out-of-the-box to allow for an even more streamlined lending process on autopilot.
All the credit line data is natively communicated to the reports allowing for live and historic data gathering and analysis in the built-in reporting dashboards or in Excel.
Work towards quicker payouts and simpler reporting with equal loan payments
When applying for a loan, the client can now specify the equal payment amount they can pay in each installment and the System will automatically round the payment to accommodate for the settings and range specified in the Back-office.
The Back-office managers can change the equal payment amount for new and active loans at any moment to increase or reduce the initial amount.
One of the more common use cases for equal payments is in conjunction with multiple disbursements. When a new disbursement happens within an existing loan, the Principal grows and borrowers often have to pay more in the next installments. This amount can now be changed with just a few clicks without the need to create new entries or loan applications.
With a new equal payment sum selected, a loan schedule is recalculated. Depending on the credit product settings, an equal payment may only include Principal, Interest, or any other fees.
Merchant cash advance calculations
The MCA edition provides unlimited flexibility when it comes to forming the repayment schedule. For each advance, the forecasted repayment schedule is formed but in case any of the payments are delayed or rolled over, the schedule is recalculated and the remaining balance is redistributed on autopilot.
In case auto-charges are enabled but the attempts to receive the contribution return an NSF error two times in a row, auto-charges will be paused to avoid accumulating NSF fees, and a staff member will be notified.
The calculation features exclusive to MCAs are:
Installment-based durations which allow you to set the schedule duration not in days/months but in payments
Merchant cash advance factor rate
Financing based on forecasted revenue of a customer
Stepping schedule - if a customer misses a contribution, the System will add a new one at the end of the schedule automatically.
Fully operational seasonal loan schedule available out-of-the-box
Charge clients payments only in the months they use your product or build a schedule around a seasonal job, a scholarship, or the months in which they use your product. As a business owner, you can set the seasons and the terms in the system UI for any credit product type (classic, annuity, leasing, etc.) allowing lenders to ride the global trend toward the as a service economy.
A couple of months back, we've started working with an innovative startup that provides amazing robotic mowers to their clients. To make their products even more accessible, they needed a credit product that behaves differently depending on the time of a year. This same principle applies to a wide range of businesses who provide their products or services not year-round. This feature eliminates all of the work you used to need to do to arrange for a custom schedule of installment charging and interest recalculation. TurnKey Lender now can do that out-of-the-box within every credit product you create.
With this feature applied to a loan, the client doesn’t get charged in the selected months when they don’t use the equipment or services. And when the season to use your product comes, the lease-to-own or rent-to-own payments continue to be paid. These settings can differ by state or manual season selection within one credit product. The client instantly sees the calculated installments and the exact dates they will be charged.
The interest for the months with no installments can be transferred to the installments for the active season evenly. You choose settings in the credit product and from there our software does the rest on autopilot.
For example, let's say that an installment is $300 with an interest of 5%. If the credit product includes 3/6/9 months of no installments, we need to distribute the interest evenly so we don't surprise the client with a much larger payment and it’s not a strain on their budget after the pause.
More credit product settings lenders will be thrilled with:
Apply custom fees only to the grace period
New Distribution mode of accruals for seasonal schedules.
New manual definition of the minimum required installment.
Charge complex compound interest based on your specific requirements out-of-the-box
Restructure the loan and offer credit vacation for the selected season.
To learn more about the fees, disbursement models, and a ton of other Calculations Engine settings, check out this guide:
https://turnkey-lender.atlassian.net/wiki/spaces/TLKB/pages/2731049178