Convert an Application to a Contract

  • Updated

Convert an Application to a Contract

Lenders, who build their lending platform using Q2 Originate and CL Loan in the same org, can use the interoperability between the two systems to convert a borrower’s loan application in the origination platform to a loan contract in the loan servicing platform.

As part of converting the application to a contract, you can:

  • Do a single-select conversion of the loan application to a loan contract.

  • Map lending products in Originate to lending products in Loan.

  • Map all the fields in the loan application to corresponding fields in the loan contract.

  • Map linked objects that are common to both the application and the contract, for example, parties. 

  • Convert child objects in the application to corresponding objects in the contract, for example, the disbursement schedule.

  • Convert child objects in the application which do not currently exist in CL Loan to objects in the contract.

  • Convert both partial and complete applications to contracts. However, for the converted contract to be in active good standing, the application must be completed before conversion.

  • Link the converted contract to the original loan application within the Originate system.

The integration behavior is consistent across the different methods of its usage, including UI and API.

Once the application's Status is updated to CLOSING DOCUMENTS GENERATED in Q2 Origination, the Convert To Contract button becomes available on the Loan Details page in the Loan Summary section. You can edit details on this page based on the fields you want to capture for the subsequent conversion and to record how the loan is to be disbursed upon conversion to the contract. For example, you can edit the Funding in the Tranches checkbox if this loan has to be partially disbursed. 

Contract Status: An application can be converted to a CL contract upon approval or at an earlier stage. In addition, the contract can get created in any of these statuses:

  • Partial Application

  • Approved

  • Active-Good Standing

You can define the status for conversion by including a field on the Application Details page, for example,  Status to Convert. This field must be mapped to the Loan Status field of the CL contract. 

Disbursal: For a contract that is converted in Active-Good Standing status, the loan disbursal happens immediately upon conversion. The disbursal date is mapped to the Expected Disbursal Date on the CL contract. For fully disbursed loans, the full amount is disbursed. For loans funded in tranches and lines of credit, the amount can be mapped to the Financed Amount field of the CL contract.

The disbursal distribution fields can be mapped if you want to define the disbursal schedule. 

A Contract ID is generated for the contract upon successful conversion. You can capture the ID of the newly created CL contract by adding a field on the Application Details page, for example, CL Contract ID.

This integration does not support refinanced loans and loans with flexible repayment.

See Conversion Setup in the Q2 Origination Administration Guide for information on setting up the conversion mapping between Q2 Origination and CL Loan and adding the fields and buttons related to this functionality to your pages if these are not displayed by default.