The main settings of the credit product are defined in the “Schedule building” tab.
General Information
Enter basic details of the credit product.
Name is the only mandatory field in the section.
Name: Enter the name of the credit product.
Description: Provide a description of the credit product to give more context about its purpose or features.
Visible to customer: Check this box if you want the credit product to be visible to customers. If disabled, you can use them for promotional purposes (see Create Credit Products available with a Promocode)
Payment Schedule
Define how the payments are calculated.
The following settings can be defined:
Loan Type
The Loan Type will affect the general approach used for the payment calculation. The available types include:
Annuity (installment based): Equal payments are made in each installment.
Annuity (daily based): Equal payments are made in each installment with daily interest calculations.
Payday loan: Features decreasing interest and a fixed principal amount.
Classic: Payments decrease over time due to the reducing interest.
Bullet: Principal is paid in full at the last installment.
Flat: Interest remains constant throughout the loan term.
Leasing: Generates a lease schedule with equal installment payments.
Rule of 78: Front-loads interest payments, with more interest paid upfront and less towards the end of the term.
Repayment period
Choose the frequency of repayments. The installment schedule will be built based on this repayment period.
Daily - repayment once a day.
Weekly - repayment once a week.
Bi-weekly - repayment once in two weeks.
Semi-Monthly - repayment twice a month.
Monthly - repayment once a month.
Bi-monthly - repayment once in two months.
Late grace days
Specify the number of grace days allowed for late payments.
As long as an installment is the “Late grace days” past-due, no past-due fees are accrued. If the debt is not repaid within the “Late grace days” period - the following day the system applies the whole past due fees for all days past due. Set the Late Grace Days value to 0 to disable this feature.
Customizable Equal Payments
When customizable equal payments are chosen, you can allow your employees (Back-Office Users) and/or Customers to specify the basic installment amount.
Each installment will then be compiled of the equal amount + any fees that are defined as “above equal payment” (for example, interest for loans of the “Classic” type is calculated above the equal payment).
The schedule will be created in the following way:
Every “repayment period” the “equal payment” is charged from the Customer. The rest of the amount to be repaid is charged with the last installment.
If enabled, Back-Office Users and/or Customers change the equal amount. The payments will be recalculated correspondingly.
Interest Settings
You can go on to define the interest that will be applied to all loans with this Credit Product.
Define the interest that shall be applied to the loan body.
The interest is defined in the “Interest” field.
It can be defined as:
Amount: amount in the currency defined for the account
Percent: the share of the “Calculate basis” (defined below)
Rate: 0,01 of the percent value
The interest is calculated per day, week, month, or year. This corresponding potion of the interest value is then accrued daily and added to the installment.
In the initial schedule, each installment contains all the interest that will be accrued if the installment is paid on the installment date.
Should the installment be paid off earlier, the interest may vary (subject to other settings of the Credit Product).
If the loan term is prolonged - the interest will be applied to the new loan period.
If the loan is paid off early - the interest may vary (subject to other settings of the Credit Product).
Variable Interest
Check the “Use variable interest rate” box to make the interest value variable.
The value defined in the “Interest” field (“4” in the example above) is the default interest assigned to the Loans of this Credit Product.
Min interest rate (“0” in the example above) and Max interest rate (“15” in the example above) are the limits to the interest that can be defined by the authorized users (“Who can edit the fee”)
Calculation Basis
If the Interest is calculated as a rate or percent, it can be calculated based on:
Remaining principal: Decreased when part of the principal is paid off. Does not depend on the fees.
Loan amount: stays the same throughout the loan term.
Installment balance: The amount due for the specific installment, including all the fees accrued during this installment.
Loan Phase
Define if the interest shall be included in the Grace period if the Grace Period is defined for the loan.
Please note that the Grace period is not related to the “Grace days”. The Grace period is one or several installment(s) that can take place at the start of the Loan Term or before the Loan Term - for which dedicated fee and interest rules can be defined.
Loan Offer Constraints
Define the minimum and maximum limits for the loan amount and term. The values below or above the limits will be declined by the system for this Loan of the Credit Product.
Fees
Define the fees that must or can be assigned to the loans of the Credit Product.
Click the “Add fee” button and select one of the available fees. The list of fees depends on your account: a dedicated article is devoted to the fees and ways to add and modify them.
When the fee is selected, you will see a tab with adjustable fee values. The list of values and settings is limited according to the most common industry standards. However, should you need more adjustments, please address TurnKey Lender team.
Manage repayment priority
Click the “Manage repayment priority” button below the Fees section to define the order in which the payment will be allocated among the accrued amounts.
The “Priority” window will emerge. Here you will see the list of all accrued amounts (Principal, Interest, and any of the Fees defined).
When a payment is received, they will be paid in this order. This is particularly important for early and partial payments.