Waive Interest on Prepayment

Owned by Jeff Brewster (Unlicensed)
Last updated: Oct 19, 2010Version comment
4 min read

Story text:   

AS AN MFI

I WANT to waive interest during repayment of certain loan products

SO THAT I do not charge interest if the client repays loans of certain product type

Business context:

MFI currently are forced to capture interest for the current active installment when a client repays a loan.

There has been an increased demand for waiving off such interest to reward early repayment in some cases.

Business Purpose

Adding customer requested feature for ENDA.


Analyst: Tejus Datta

Scenarios:

scenario 1: Today’s date is 31st Aug

Installment Date

Principal

interest

Fee

TOTAL

Status

25-aug-2010

100

5

1

106

due

1-sep-2010

100

5

1

106

future

8-sep-2010

100

5

1

106

future

In the above scenario, the amount highlighted in YELLOW will need to be paid while repaying the loan. The amount to be repaid will be 307.

Note: Fee for the current ongoing installment will not be waived off.

scenario 2: Today’s date is 31st Aug

Installment Date

Principal

interest

Fee

TOTAL

Status

25-aug-2010

100

5

1

106

PAID

1-sep-2010

100

5

1

106

future

8-sep-2010

100

5

1

106

future

In the above scenario, the amount highlighted in YELLOW will need to be paid while repaying the loan. The amount to be repaid will be 200.

scenario 3: Today’s date is 31st Aug

Installment Date

Principal

interest

Fee

TOTAL

Status

24-aug-2010

100

5

1

106

due

31-aug-2010

100

5

1

106

DUE

7-sep-2010

100

5

1

106

future

In the above scenario, the amount highlighted in YELLOW will need to be paid while repaying the loan. The amount to be repaid will be 312.  

 

 

Detailed Story Narrative:

An admin should be able to specify while creating a loan product if or not interest can be waived while repaying a loan of that product type.

While repaying the loan, the user should be provided with an option to either continue with the repay transaction as normal (without waving interest: AS IS) or to waive off interest.

Acceptance Criteria:

#

Given (that)

When

Then

1.

A user with permission to create a loan product has logged in

The user is creating a new loan product

The user is provided with the option of marking the Loan product as ‘Can waive interest for repayment’ (This should be a checkbox)

2.

A user with permission to Edit a loan product has logged in

The user is Editing an existing loan product

The user is provided with the option of marking the Loan product as ‘Can waive interest for repayment’ (This should be a checkbox).
Once done, the same should be visible from the Loan products details page as well as the Preview page on product creation flow.

3.

A loan product has been marked as ‘Can waive off interest’

You click on ‘Repay Loan’ link on the loan details page

- The user has an option to either waive interest or not

- The waive interest off radio button is selected by default

4.

A loan product has been marked as ‘Can waive off interest’

The user selects Waive off interest radio button on the repay loan page

The Amount is calculated by waiving off all the future fee, future interests and the payment due interest. The penalty is not waived off.

5.

A loan product has been marked as ‘Can waive off interest’

The user selects With interest radio button on the repay loan page

The Amount is calculated by waiving off all the future fee, future interests. The payment due interest is included in the calculate amount. The penalty is not waived off. This should be based on the current implementation of repay loan (AS IS)

6.

A loan product has been marked as ‘Can waive off interest’

The user selects to preview and submit while on the repay loan page after selecting the waive interest option

- The Amount is calculated by waiving off all the future fee, future interests and the interest for the current ongoing installment. The penalty is not waived off.

7.

A loan has been waived off by waiving interest (last transaction)

The user clicks on apply adjustment

Upon completing the adjustment, the loan schedule should be reinstated to the state it was before repayment.

8.

A loan has been waived off by waiving interest (last transaction)

When viewing the Loan Details page

  1. The status should reflect ‘Closed-Obligation Met’. (AS IS)
  2. The Repayment schedule should display all installments under the Installments Paid section

  1. Loan Balance on Details page should display 0
  2. ‘View All Account Activity’ should have an entry of repayment as the latest entry.
  3. Status History should reflect NewStatus as ‘Closed-Obligation met’ AS IS |

ScreenShot:

 

Open Questions/Issues

Sign-Off History

Signed – Off by

Date of Sign-off

Additional Comments