Billing

Billing refers to the generation of bills the borrower has to pay for the due amount on the loan. Lender must periodically bill the active loans to automatically generate the proper documents under Transactions, Bills. Borrowers must pay against these bills.

In CL Loan, each financial activity or action that has a financial impact is recorded as a transaction on the loan contract. Billing related transactions are created or updated within the the Transactions tab.

• The Bills sub tab displays the bills generated by the system, and indicates the paid and outstanding bills.
• The Charges sub tab displays transactions of any charges created on the loan contract. For example, when a late fee is charged, or a regular maintenance fee is charged, a transaction is created.
• The Others sub tab is provided to record any other transactions or activity on the loan contract. For example, if the loan is restructured, a transaction is created defining the terms of the restructure. The Activity section in loan contract displays any such change to the loan. For example, changed due day, or interest rate. The  Contract Details section of the loan contract displays the original values of these loan attributes.For an interest based loan, the due amount is derived from the current payment amount on the loan, unless this is the last due. Here, the due amount is equal to the payoff amount.
• For an amortization based loan, along with the above, each due includes additional information such as billed principal and billed interest.
• After payment is received against a bill, the fields of the Payment section, such as payment amount and date are automatically updated.

In CL Loan, the billing looks at the Repayment Schedule Summary for generating the dues. However, if holiday schedules or step-up schedules are defined for the contract, then billing looks at the Repayment Schedule for generating dues.

Once the Principal Remaining on the loan contract is zero, the loan gets closed, even if unpaid bills exist for the contract.

Billing takes the Current payment amount from the loan account. It creates a due or a bill for this current payment amount and then takes a look at the Repayment Schedule, picks up the next payment amount and updates the Next repayment amount as the Current payment amount. When the loan reaches its last billing date, which is nothing but the maturity date on the loan account, it selects the loan payoff amount on the loan account and bills the customer for this.

Let us consider the following scenarios for a better understanding:

• If a customer is making the payments on the due date, the last bill amount is the same as what is present in the Repayment schedule.
• If a customer is making early payments, the last bill amount is less than what is present in the Repayment schedule.
• If a customer is making late payments, the last bill amount is more than what is present in the Repayment schedule.

Addition billing scenarios

• If Payment  Date = Disbursal Date, then the first bill is generated at the time of disbursal.
• In case of flexible AMZ loans, 1 closed IPT and 1 open IPT is created at the time of disbursal. The due amount and the due date in closed IPT is same as in the1st schedule.