| Page Properties | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
...
Many Banks and Financial Institutions use lending rates that are linked to the Base Lending Rates defined by the Central Bank of the country. Home Loans and other longer term loans are usually given out by banks/financial institutions at floating interest rates - where the interest rate applicable for the loan is linked to the interest rate set by the Central Bank and is periodically revised by the Central Bank. The interest rate applicable for the loan, can change during the tenure of the loan. The loan may start off as a 10% loan and may get revised to 10.5% after a period of time and can even be revised downwards (for example: 9.5%) depending on guidelines issued by the Central Bank from time-to-time.
Background and strategic fit
...
- Interest Rate periods can be added/updated/modified only with a future start date
- Only one Base Lending Rate type of scheme at any given time
- Differential to Base Lending Rate type cannot be created without Base Lending Rate already defined
- interestRatePeriodEnum attribute for Differential to Base Lending Rate type will be same as Base Lending Rate
- Base Lending Rate cannot be inactivated when there is any Differential to Base Lending Rate type active
Defining a Loan Product
API
Following additional attributes will be added to /mifosng-provider/api/v1/loanproducts list/add/update APIs
| Sl | Attribute | Type | Definition |
| Restrictions1 | isLinkedToFloatingInterestRates | boolean | Identifies a loan product is linked to floating rates |
| 2 | floatingRateId | long | Floating rates scheme to be followed |
| 3 | interestRateDifferential | decimal | Differential on top of rate as derived by Floating rate scheme Basically "Loan Product Base Rate" is derived based on this differential |
| 4 | minDifferentialLendingRate | decimal | Min differential w.r.t "Loan Product Base Rate" while providing loans |
| 5 | defaultDifferentialLendingRate | decimal | Default differential w.r.t "Loan Product Base Rate" while providing loans |
| 6 | maxDifferentialLendingRate | decimal | Default differential w.r.t "Loan Product Base Rate" while providing loans |
| 7 | isFloatingInterestRateCalculationAllowed | boolean | If true, loan can be given with floating interest calculations If false, interest rate for the loan is fixed as per the rate derived as on loan application date |
UI
Loan product create/edit screens will have following additional fields
- A checkbox "Is Linked To Floating Interest Rates" under section "Terms"
- If unchecked, existing "Nominal interest rate" attributes would be visible and captured
- If checked, attributes 2-6 defined above will become visible and be captured
- A checkbox "Is Floating Interest Rate Calculation Allowed" under section "Interest Recalculation"
- Only allowed to check if Interest Method is Declining Balance
Defining Loan
API
Following additional attributes will be added to /mifosng-provider/api/v1/loans view/create/edit APIs
| Attribute | Type | Description | Restrictions |
|---|---|---|---|
| interestRateDifferential | decimal | Interest Rate differential applicable to loan application w.r.t "Loan Product Base Rate" | Should be within min/max rage as defined in loan product |
| isFloatingInterestRate | boolean | Is floating interest rate calculation applied for the loan? If false, flat interest rate as applicable on loan application date If true, interest rate as applicable from period to period | Only allowed if isFloatingInterestRateCalculationAllowed is true at loan product definition |
UI
Loan create/edit screens will have following attributes
- "Nominal interest rate" field will be replace with "Interest Rate Differential" field in case loan product is linked to Floating Interest Rates
- A checkbox "Is Floating Interest Rate Loan" will be added in case loan product is linked to Floating Interest Rates and isFloatingInterestRateCalculationAllowed is allowed for the loan product