Fee threshold

  • Updated

Fee threshold

The lenders can fix the maximum fee that can be charged on a loan. This is managed using the Threshold field on the CL Contract page.

Example 1

  • Loan amount = 1000

  • Interest = 6%

  • Terms = 6

  • Periodic Fee Amount =50

  • Periodic Fee Frequency = Monthly

  • Threshold Type = Amount

  • Threshold = 1200

Scenario1

The following image describes the scenario when no threshold is applied, and the fee is applied to all the terms.

Scenario 2

The following image describes the scenario when a threshold of 1200 is applied on the due amount that reaches after the 4th term so no fee is applied to the 5th and the 6th terms.

Example 2

  • Loan amount = 1000

  • Interest = 6%

  • Terms = 6

  • Periodic Fee Amount = 50

  • Periodic Fee Frequency = Monthly

  • Threshold Type = Amount

  • Threshold =1125

The following image describes the scenario where partial payment is made towards the fee when threshold is reached. Partial fee is applied ti the 3rd term and  no fee is applied to the 4th, 5th, and 6th terms.

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