When the promise to pay is used

The Promise To Pay functionality is used when a payment is a past due, but the customer cannot repay the bad debt immediately and addresses the Lender’s employees with a promise to pay on a specific date or before it.

If a Promise to Pay has been arranged with the customer, it can be added to the loan information on the Servicing and Collection workplace if the credit state is Past Due or Active and on the Collection workplace if the credit state is Past Due.

How a promise to pay affects the loan

There are three functions performed by the Promise to Pay:

Register the promise: Actually, make a record of the customer’s promise to pay
Send a reminder: TurnKey Lender automatically sends notifications to the customer on the creation of a new Promise to Pay and if no payment has been received on the corresponding date.
Liberate customer from the late interest and late fees: If it’s been agreed so, the Back-Office user can disable accrual of the Past Due Interest and Late Fee until the promise date. However, if the promise isn’t fulfilled, the system will recalculate the interest and fee for all the time back.

Add a new promise to pay

Navigate to the workplace, open the loan details, and select the “Promise to Pay” tab.

Click the “Add promise to pay” button.

Promise to pay window will emerge

In the emerged window, you must:

Define the amount that the customer has promised to pay
Define the date for which the promise has been made
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The amount of the bad debt is defined automatically. At one point in time, there can be only one active Promise to Pay period.

Define if late fees and late interest shall be accrued.

If the checkbox "Do not accrue late fees and late interest" is enabled, the corresponding interest and fees are not accrued during the Promise to Pay period. If the checkbox is disabled, they are accrued as usual.

It is possible to configure the default state of the checkbox at the configuration file level. Therefore, if the more common policy is not to accrue late fees and late interest, it can be set up correspondingly.

Promise to pay the tab

Below the “Add promise to pay” button, there is a table with basic details of all the past promises to pay (if any) and of an active promise to pay (if defined).

You can view details of the promises related to past dates, as well as edit (pencil icon) and delete (bin icon) the active promises.

The icon on the right is the fast way to see the status of the promise:

- Active: the payment is promised for a day in the future and has not yet been made

- Paid: the amount promised has been paid

- Missed: the payment was promised for a day in the past and has not been yet made

- Cancelled