Navigation: There are 2 ways to add a loan


Description: Add a new loan or edit an existing loan for the borrower.

The following are the required fields to create a new loan.
Borrower
Choose a borrower. You can search by name. This field is only visible if you add a loan by visiting Loans >> Add Loan.

Loan Product
Select the Loan Product. You can edit the options in View Loan Products.

Loan #
The system will automatically generate a unique loan number. You can also type a number but it must be a unique loan number in the branch.

Loan Terms:

Disbursed By
Select the method you used to release the money to the borrower. You can edit the options in Add/Edit Disbursed By.


Principal Amount
Type the principal amount that is released to the borrower.

Loan Release Date
Select the released date of the principal amount.

Interest:

Interest Method

Select how the loan interest should be calculated. You can select from 

  • Flat Rate
    - Principal and total interest are divided equally in all the repayment cycles.
  • Reducing Balance - Equal Installments
    - In each repayment cycle, the interest is calculated based on the remaining due principal amount. The due amounts for each repayment is the same.
  • Reducing Balance - Equal Principal
    - In each repayment cycle, the interest is calculated on the remaining principal amount. However, in each repayment, the principal is divided equally among all repayments.
  • Interest-Only
    - The interest is divided equally among all repayments. However, only interest is charged in all the repayment cycle except the last repayment. The entire principal amount is charged on the last repayment date along with remaining interest.
  • Compound Interest.
    - The interest is calculated on the previous repayment's total due amount. Hence, interest is compounded for each repayment.


Interest Type

You can choose if the interest rate is a percentage value or a fixed amount. You can select from 

  • I want Interest to be percentage % based
    - Percentage based value such as 5%.
  • I want Interest to be a fixed amount Per Cycle
    - Only valid for Flat-Rate and Interest-Only methods.
    - If you select a fixed amount, then a fixed amount of interest will be charged in each repayment cycle.


Loan Interest
Type the interest rate of the loan and select the period. You can select from 
  • Per Day
  • Per Week
  • Per Month
  • Per Year

For example, if you type 5 and select Per Month, this means that the interest rate is 5% per month for percentage based interest. For fixed amount interest, it would be $5 interest for each month if you select fixed amount per cycle in Interest Type above.


NOTE

If you select Per Year in Loan Interest %, and Duration and Repayment is in days, then please visit Admin >> Account Settings to select the number of days in a year for loan interest calculation. For example if you have a loan for $5000 at 10% Per Year for 14 days, you can select in Account Settings if the interest should be divided by 360 or 365 days in a year. Similarly, if you have a monthly loan and payment is daily, you can select the number of days in a month in Account Settings.


Duration:
Loan Duration
Select the duration of the loan. You can select from

  • Days
  • Weeks
  • Months
  • Years.

Repayments:
Repayment Cycle
Select the repayment cycle for the loan. You can select 
  • Daily
  • Weekly
  • Biweekly (Every 2 weeks)
  • Monthly
  • Bimonthly (Every 2 months)
  • Quarterly (Every 3 months)
  • Semi-Annual (Every 6 months)
  • Yearly
  • Lump-Sum (One-Time)
    - Lump-Sum can only be selected for Flat-Rate interest method 
  • You can also create your own repayment cycles by clicking Add Repayment Cycle.

The borrower will pay the loan based on this cycle. For example, if you select Daily, then the borrower has to pay daily to you.

If you select Lump-Sum, then there will be a single repayment on the due date. The loan due date will be calculated on the basis of the Loan Duration and Loan Released Date.


Number of Repayments

This is the number of repayments. If you select Daily in Repayment Cycle above and Number of Repayments is 30, then the borrower has to pay the loan daily for 30 days and the total loan due amount would be divided in 30 days.


NOTE

Let's say the Loan Duration doesn't match with Repayment Cycle and Number of Repayments. For example if your Loan Duration is 3 Months but Repayment Cycle is Weekly and Number of Repayments is 1, then loan due date and schedule will be calculated based on the repayment cycle. So in this case, the loan cycle would be 1 week from released date. However, the interest will still be calculated based on the Loan Duration.


Advance Settings:

The following are the optional fields.

Decimal Places
This is an optional field. Select if the repayment amounts should be calculated/shown in decimals or as integers (whole amounts without decimals). You can select from

  • Round Off to 2 Decimal Places
    - This is the default option. For example 2.359 will be rounded off to 2.36
  • Round Off to Integer
    - This will round off the value to an integer. For example 2.539 will be rounded off to 3.00.

How should Interest be charged in Loan Schedule?
This is an optional field. Select how the total interest should be charged in the loan schedule. You can select from

  • Include interest normally as per Interest Method
    - The interest will be shown as per the Interest Method above. 
  • Charge All Interest on the Released Date
    - All the interest will be charged on the released date.
  • Charge All Interest on the First Repayment
    - All interest will be charged on the first repayment date as per the schedule.
  • Charge All Interest on the Last Repayment
    - All interest will be charged on the last repayment as per the schedule.

Interest Start Date (optional)

This is an optional field. You can select the date when interest will start to be calculated on the Principal Amount above. If you leave this field empty, the interest would start from the Loan Release Date selected above.


For example, if you select weekly repayment and Loan Released Date is 1st January and you put Interest Start Date as 5th January, then the next repayment would be on 12th January (5+7). But if Interest Start Date is empty, then next repayment would be on 8th Jan (1+7).


Sometimes, lending companies want to charge interest at a later date and give a few days interest free at the start of the loan. For example, if you release the loan on the night of 31st January, you might want interest to begin calculating on 1st February since there are only a few hours left in 31st January.


First Repayment Date (optional)
This is an optional field. You can select the date of the first repayment. If you leave this field empty, the first repayment date would be calculated based on the Repayment Cycle above.

  • If you check Calculate first repayment on pro-rata basis, the first repayment amount will be calculated on pro-rata basis based on the first repayment date

  • If you check Adjust Fees in first repayment on pro-rata basis, the non-deductable fees in first repayment amount will be calculated on pro-rata basis based on the first repayment date. After the first repayment, fees will be charged in full.

  • If you check Do not adjust remaining repayments (Flat-Rate and Interest-Only) , the remaining repayments (after the first repayment) will remain the same as before. For example, let's assume there is $1000 due every repayment and there are total of 10 repayments and the first repayment has been calculated as $100 on pro-rata basis. If you leave this option unchecked, the remaining $900($1000-$100) will be divided equally among the remaining 9 repayments so each repayment will have $100 due($900/9). But if you check this option, each repayment will still have the original due of $1000 irrespective of what the first repayment is.

Sometimes, companies want to charge the first repayment at an earlier date to reduce risk. For example, if the Repayment Cycle is Weekly, then the system would automatically set the repayments every week and the first repayment would be 1 week from the Loan Release Date above. But, you might want the first repayment earlier than 1 week to reduce risk or to follow a certain schedule. If you do select a date here, the repayment schedule will be calculated from the First Repayment Date.

First Repayment Amount (optional)

This is an optional field. Only valid for Flat-Rate interest method. You can type an amount that will be charged on the first repayment.  If you leave this field empty, the first repayment amount would be calculated based on the Loan Interest and Loan Duration fields above.


Sometimes, companies want to charge a higher amount on the first repayment to reduce risk. If you do type an amount here, the First Repayment Amount will be subtracted from the total loan due amount and the remaining amount will be divided in the repayment cycle as per the Interest Method above.


Last Repayment Amount (optional)

This is an optional field. Only valid for Flat-Rate interest method. You can type an amount that will be charged on the last repayment.  If you leave this field empty, the last repayment amount would be calculated based on the Loan Interest and Loan Duration fields above.


Override Maturity Date
This is an optional field. You can specify a maturity date for the loan. If you leave this field empty,  the system will calculate maturity date as per the Repayment Cycle selected above.


Some lending companies have specific maturity dates. For example, let's say you have a 1 month loan with daily repayments that starts on 15th May and ends on 14th June. But you don't want to count the days between the start and end date every time you add a loan. In this case, you can select a really high value in Repayment Cycle like 60 Days and put 14th June in Override Maturity Date. The system will automatically stop at 14th June and won't count any repayments after that.


Override Each Repayment Amount to

This is an optional field. Only valid for Flat-Rate interest method. You can specify the total amount for each repayment cycle. If you leave this field empty,  the system will calculate repayment amount as per the Repayment Cycle selected above.

Some lending companies don't calculate the exact interest amount for each repayment cycle. Consider a scenario where you give a borrower $5000 for 24 weeks and agree to a total repayment of $288.75 for each week. If you multiply $288.75 by 24 weeks, you get $6930. So the total interest charged is $6930-$5000 = $1930. If you divide $1930 by 24 weeks, you get 80.416666666666 interest for each repayment cycle. If you enter that in Loan Interest above (such as 80.41 or 80.42), the due amount for each repayment would not all be the same due to the rounding off error. Hence for this type of loan, you can put $288.75 in Override Each Repayment Amount to and the system will automatically calculate the interest for each repayment and do the proper rounding off. In this case, you can put 0 in Loan Interest above.


Loan Fees (optional):

Type the amount for each fee. If you do not see this option and you want to add loan fees, please visit Loan Fees. You can specify Non-Deductable or Deductable Fees in Loan Fees.


There are 2 types of Loan Fees:

  • Non Deductable Fees
    - The loan fee will be added to the total loan due (Principal Amount + Interest + Penalty) and the borrower will have to pay back this fee. You will see a schedule box next to Non Deductable Fees on how the fees should be shown in the loan schedule. You can select from:
    • Don't include in the loan schedule
      The fee will not be included in the loan schedule. You will have to manually edit the loan schedule and add the fee.

    • Distribute Fee Evenly Among All Repayments
      For example, if the fee entered is 1,000 and there are 10 due repayments in the loan schedule, each repayment will have 100 fee added to it (1,000/10).

    • Charge Fee on the Released Date
      For example, if the fee entered is 1,000, a due repayment of 1,000 will be added in the loan schedule on the loan released date.

    • Charge Fee on the First Repayment
      For example, if the fee entered is 1,000, the first repayment in the loan schedule will have 1,000 fee added to it.

    • Charge Fee on the Last Repayment
      For example, if the fee entered is 1,000, the last repayment in the loan schedule will have 1,000 fee added to it.

    • Charge Same Fee on All Repayments
      For example, if the fee entered is 1,000 and there are 10 due repayments in the loan schedule, each repayment will have 1,000 fee added to it. Hence the total fee will be 10,000 (1,000 x 10).

  • Deductable Fees
    • The loan fee will NOT be added to the loan due. It is assumed that the borrower has already paid back this fee. Many cooperative lending companies use deducable fees.
    • For example, if you give a loan for $1000 and the deductable fee is $10. Then the actual principal amount that is given to borrower would be $1000 - $10 = $990. But the borrower still has to pay back $1000. So even though you only gave $990 to the borrower, he/she has to pay back $1000.

Manual Penalty (optional)

This is an optional field. You will only see this when you edit a loan.


If you have added Loan Penalty Settings, the system will automatically calculate penalty on late repayments and loans that have not been fully paid by the maturity date. However, you can override the system generated penalty by checking Override System Generated Penalties?. Then, enter the amount in Manual Penalty Amount. To have no penalty, type 0.


Other (optional):

Description

Add a description or notes for the loan.


Loan Files

You can select and upload files for the loan. This is useful in uploading loan agreements and keeping a backup. To easily upload manual documents, you can take a picture with your mobile phone and then upload here. The site is mobile compatible.


Loan Status

This is an optional field. You will only see this when you edit a loan. You can change the loan status to 

  • Processing
  • Open
  • Defaulted
  • Fraud
  • Denied
To learn more, please visit Loan Status.