Loan Product Fields
- Laurie Wilmot (Unlicensed)
- Massabe Lydiane
- Mounashree S
Loan Product Fields
| Field Name (attribute) | Description | Example | Validations (if applicable) |
|---|---|---|---|
| Details Section | |||
| Product name | The product name is a unique identifier for the lending product. The product name is used:
| Home Building Loan A | Required field Alphanumeric Maximum 100 characters |
| Short name | The short name is a unique identifier for the lending product. The short name is used:
| BldA | Required field Alphanumeric Maximum 4 characters |
| Description | The description is used to provide additional information regarding the purpose and characteristics of the loan product. The description is used:
| Home Building Loan A is available for new construction only | Alphanumeric Maximum 500 characters |
| Fund | Loan products may be assigned to a fund set up by your financial institution. If available, the fund field can be used for tracking and reporting on groups of loans. If your financial institution has set up funds, the Fund list will be populated and you will be able to select a fund. | May be left blank or select from list. | |
| Start date | The date that the loan product will be active and available to clients. If blank, the loan product will be active as soon as it is created. Select the date from the calendar popup. | 01 Jan 2013 | Date dd mm yyyy |
| Close date | The date that the loan product will become inactive and unavailable to clients. If blank, the load product will never become inactive. Select the date from the calendar popup. | 31 Dec 2020 | Date dd mm yyyy |
| Include borrower loan counter | A borrower loan counter (cycle) is used for tracking how many time the client has taken this particular product. This is useful for measuring social indicators with each loan a client has taken. It is used for PPI related reporting. Check this checkbox to include a loan counter for a borrower (client). Uncheck this checkbox to not include a loan counter for a borrower (client). | ||
| Currency Section | |||
| Currency | The currency in which the loan will be disbursed. Currencies are set up by your financial institution. Select the loan product's currency from the Currency list. | Required field | |
| Decimal places | The number of decimal places to be used to track and report on loans. | 2 | Required field Numeric |
| Currency in multiples of | You can enter multiples of currency value. For example, if you put "multiples of 100", the currency value will be rounded off to 200, 300, 400, etc. | 0 | Required field Numeric |
| Terms Section | |||
| Terms vary based on Loan Cycle | A loan cycle tracks the number of times a borrower has taken a particular loan. Leave this checkbox unchecked if the terms do not vary based on the Loan Cycle. Check this checkbox if terms vary based on the Loan Cycle. See additional fields for additional information required for this type of loan product. | ||
Principal: Minimum Default Maximum | These fields are used to define the minimum, default and maximum principal allowed for the loan product. When a client applies for a loan account, the loan account application will be populated with the default principal amount. The lending officer may modify the default within the minimum to maximum range. Using the example values (see column to the right), a new loan account application for this loan product would default to a principal amount of 100 (in the selected currency). The lending officer may modify the principal as low as 25 and as high as 250. | Minimum: 25 Default: 100 Maximum: 250 | Required fields Numeric whole numbers |
Number of repayments: Minimum Default Maximum | These fields are used to define the minimum, default and maximum number of repayments allowed for the loan product. When a client applies for a loan account, the loan account application will be populated with the default number of repayments. The lending officer may modify the default within the minimum to maximum range. Using the example values (see column to the right), a new loan account application for this loan product would default to 12 repayments. The lending officer may modify the number of repayments as low as 6 and as high as 60. | Minimum: 6 Default: 12 Maximum: 60 | Required fields Numeric whole numbers |
Nominal interest rate: Minimum Default Maximum Period | These fields are used to define the minimum, default, maximum period for the nominal interest rate allowed for the loan product. The minimum, default, and maximum nominal interest rates are expressed as percentages. The period value is selected from the choices in the list (Per Month, Per Year). The period value is not modifiable on individual loan accounts. When a client applies for a loan account, the loan account application will be populated with the nominal interest rate. The lending officer may modify the default within the minimum to maximum range. Using the example values (see column to the right), a new loan account application for this loan product would default to a nominal interest rate of 1.5. The lending officer may modify the nominal interest rate as low as 1.25 and as high as 2.0. In this example, the nominal interest rate will be applied monthly. | Minimum: 1.25 Default: 1.5 Maximum: 2.0 Period: Per Month | Required fields Numeric with decimals |
Repaid every | These fields are input to calculate the repayment schedule for a loan account and are used to determine when payments are due. Enter a number into the first field and then select the frequency from the list (Days, Weeks, Months). Using the example values (see column to the right), a new loan account application for this product would be initially set for repayments every 2 weeks. The lending officer may change the payment timing during the loan application process. | 2 Weeks | Required fields Numeric and select from list |
| Setting Section | |||
| Amortization | The Amortization value is input to calculate the repayment amounts for repayment of the loan. Select Equal installments or Equal principal payments from the Amortization list. If Equal installments is selected, all repayment amounts will be equal but the interest, fees, penalties, and principal amounts will vary with each repayment. If Equal principal payments is selected, the repayments amounts will vary depending upon the interest, fees, and penalty amounts in the repayment and the principal amount will be the same for all repayments. | Required field | |
| Interest method | The Interest method value is input to calculate the payments amount for repayment of the loan. Select Flat or Declining balance. | Required field | |
| Interest calculation period |
| ||
| Arrears tolerance | With 'Arrears tolerance' you can specify a tolerance amount and if the loan is behind (in arrears), but within the tolerance, it won't be classified as 'in arrears' and part of the portfolio at risk. | If 'Arrears Tolerance' is $ 100 then up to that amount is not considered as arrears. | |
| Repayment strategy (Payment Application Logic) | Repayments have up to four components:
The repayment strategy determines the sequence in which each of the components is paid. Mifos StyleReplicates the same payment order of our previous legacy mifos software. Payment order:
For example taking a loan with two installments due (one current and one overdue) where installment will be 240 (200 principal + 20 interest + 10 fees + 10 Penalties ) each. - A partial payment of 300 results in payment been broken up as 10 overdue penalties, 10 due penalties, 10 overdue fees, 10 due fees, 20 overdue interest, 20 due interest, 200 overdue principal and 20 due principal. Therefore installment #2 (remaining 180 due principal) Early payment: Any payment that pays off an installment that occurs before the due date of the installment. There is no incentive/advantage to making an early payment as there is no decrease in cost of the loan. On time payment: Any payment that pays off an installment that occurs exactly on the due date of the installment. Late payment: Any payment that pays off an installment that occurs after the due date of the installment. There is no penalization for late payment. The total cost of the loan does not automatically increase, no penalties are automatically applied to the loan. Principal Interest Penalties Fees OrderThe key aspect of this strategy is the payment order. Payment order:
For example taking a loan with two installments due (one current and one overdue) where installment will be 240 (200 principal + 20 interest + 10 fees + 10 Penalties ) each. - A partial payment of 300 results in payment been broken up as 200 overdue principal, 100 due principal. Therefore installment #1 (remaining 20 overdue interest, 10 overdue fee and 10 overdue penalties) and installment #2 (remaining 100 principal, 20 due interest, 10 due fee and 10 overdue penalties) Early payment: Any payment that pays off an installment that occurs before the due date of the installment. There is no incentive/advantage to making an early payment as there is no decrease in cost of the loan. On time payment: Any payment that pays off an installment that occurs exactly on the due date of the installment. Late payment: Any payment that pays off an installment that occurs after the due date of the installment. There is no penalization for late payment. The total cost of the loan does not automatically increase, no penalties are automatically applied to the loan. Interest Principal Penalties Fees OrderThe key aspect of this strategy is the payment order. Payment order:
For example taking a loan with two installments due (one current and one overdue) where installment will be 240 (200 principal + 20 interest + 10 fees + 10 Penalties ) each. - A partial payment of 300 results in payment been broken up as 20 overdue interest, 20 due interest, 200 overdue principal, 60 due principal. Therefore installment #1 (remaining 10 overdue fee and 10 overdue penalties) and installment #2 (remaining principal 140, due fee 10 and 10 overdue penalties) Early payment: Any payment that pays off an installment that occurs before the due date of the installment. There is no incentive/advantage to making an early payment as there is no decrease in cost of the loan. On time payment: Any payment that pays off an installment that occurs exactly on the due date of the installment. Late payment: Any payment that pays off an installment that occurs after the due date of the installment. There is no penalization for late payment. The total cost of the loan does not automatically increase, no penalties are automatically applied to the loan. RBI (India)Per RBI regulations, all overdue should be paid, only then can the due amount will be collected. When the overdue amount is paid, the payment order will be overdue penalties, overdue fees, overdue principal. Only after the payment of overdue, the due is collected and the payment order will be due fees, due interest and due principal. Payment order:
For example taking a loan with two installments due (one current and one overdue) where installment will be 240 (200 principal + 20 interest + 10 fees + 10 Penalties ) each. - A partial payment of 300 results in payment been broken up as 10 overdue penalties, 10 overdue fees, 20 overdue interest, 200 overdue principal on installment #1 and 10 due penalties, 10 due fees, 20 due interest, 20 due principal on installment #2 (remaining principal 180) Early payment: Any payment that pays off an installment that occurs before the due date of the installment. There is no incentive/advantage to making an early payment as there is no decrease in cost of the loan. On time payment: Any payment that pays off an installment that occurs exactly on the due date of the installment. Late payment: Any payment that pays off an installment that occurs after the due date of the installment. There is no penalization for late payment. The total cost of the loan does not automatically increase, no penalties are automatically applied to the loan. This strategy works similar to the Interest Principal Penalties Fees Order for on-time and late payments, i.e Payment order:
For example taking a loan with two installments due (one current and one overdue) where installment will be 240 (200 principal + 20 interest + 10 fees + 10 Penalties ) each. - A partial payment of 300 results in payment been broken up as 20 overdue interest, 20 due interest, 200 overdue principal, 60 due principal. Therefore installment #1 (remaining 10 overdue fee and 10 overdue penalties) and installment #2 (remaining principal 140, due fee 10 and 10 overdue penalties). Early payment: Any payment that pays off an installment that occurs before the due date of the installment. There is no incentive/advantage to making an early payment as there is no decrease in cost of the loan. However, early payments are allocated only towards principal payments of future installments. Interest and fees/penalties of future installments are not paid and may be waived manually if required On time payment: Any payment that pays off an installment that occurs exactly on the due date of the installment. Late payment: Any payment that pays off an installment that occurs after the due date of the installment. There is no penalization for late payment. The total cost of the loan does not automatically increase, no penalties are automatically applied to the loan. | ||
| Interest free period | If the Interest Free Period is '4' and the client's Repayment Frequency is every week, then for the first four weeks the client need not to pay interest, he has to pay principle due for that week only. | ||
Moratorium On principal payment On interest payment | Suppose, If Moratorium
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| Number of days a loan may be overdue before moving into arrears | A loan is in arrears once the number of days entered into this field is exceeded. If this field is blank, the loan will be in arrears the day after a scheduled payment is missed. If 5 is specified, as in the example value, the loan will be in arrears on the 6th day after a scheduled payment is missed. | 5 | |
| Maximum number of days a loan may be overdue before becoming an NPA (non performing asset) | A loan is an NPA (non performing asset) once the number of days entered into this field is exceeded. If this field is blank, the loan will be an NPA the day after a scheduled payment is missed. If 35 is specified, as in the example value, the loan will be an NPA on the 36th day after a scheduled payment is missed. | 35 | |
| Recalculate Interest | Please check the box if you want to recalculate interest for each period based on outstanding for that month/week. Once you check it, it shows hidden fields to Recalculate Interest as shown here. | ||
| Tranche Details Section | |||
| Is Multi Disburse Loan | Leave this checkbox unchecked if the loan is a single disburse loan. Check this checkbox if the loan is a multi disburse loan. See additional fields for additional information required for this type of loan. | ||
| Charges Section | |||
| Charges | Select a charge from the Charges list and click Add. If more charges apply to the loan product, select additional charges and click Add for each. | ||
| Overdue Charges | Select an overdue charge from the Overdue Charges list and click Add. If more overdue charges apply to the loan product, select additional overdue charges and click Add for each. | ||
| Accounting Section | |||
| Accounting | Select one from:
If Cash, Accrual (periodic), or Accrual (up front) is selected, see additional fields. | ||