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Any number of floating rate schemes can be created. But they would fall under the one of the 3 types explained below. An example illustration is given far down below.

Base Lending Rate
  • This is a unique floating rate scheme identified by isBaseLendingRate attribute
  • There can be only one Base Lending Rate for an organisation at any given time
  • Will have its own period and interest definition
  • Loan Products that wants to re-use Base Lending Rate periods with only a differential rate added on top of it should link to this type of scheme
Differential to Base Lending Rate
  • Floating rate scheme dependent on Base Lending Rate
  • Can define its own Floating rate periods (independent of Base Lending Rate)
  • Interest rate specified is differential of Base Lending Rate as of start date of the given period (attribute ratePeriod.isDifferentialToBaseLendingRate will be true)
  • Cannot exist without a Base Lending Rate already defined
  • Loan Products that wants to use a differential rate on top of prevailing Base Lending Rate but with their own time periods should link to this type of scheme
Independent Floating Lending Rate
  • Floating interest rate scheme with own rate and period
  • Not dependent on Base Lending Rate
  • floatingRate.isBaseLendingRate and ratePeriod.isDifferentialToBaseLendingRate attributes will be false
  • Loan Products that wants to define an independent floating rate and time periods should link to this type of scheme

UI Screens

  • New Button under "Admin > Products" by name "Floating Interest Rates"
  • New screen that lists all the "Floating Interest Rates" schemes along with "Create" button.
  • New screen to Create Floating Interest Rate
  • New Screen to View Interest Rate and Applicable Periods along with "Edit" button
  • New Screen to Edit Floating Interest Rate

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Loan Product 

Differential Rate

 

(A)

Loan Application

Differential Rate

 

(B)

Date

 

 

(C)

Base Lending Rate in %

(Rates defined as part of

"Base Lending Rate type")

 (D)

Floating Interest Rate

(Loan product Linked to

"Base Lending Rate")

(E)=(A)+(B)+(D as of date)

Differential to Base Lending Rate %

(Rates defined as part of

"Differential to Base Lending Rate type")

 (F)

Floating Interest Rate

(Loan product Linked to

"Differential to Base Lending Rate type") 

(G)=(F)+(E as of the period start date)

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