Adjusting the loan principal amount
Loan Principal Adjustment is carried out when a borrower requests to disburse an additional principal amount or requests to reduce the principal amount on an existing contract. The Principal Remaining is adjusted while keeping the other terms of the contract unchanged, for example, rate of interest. You can increase the loan principal up to the maximum credit limit defined for the LOC product and the available funds on the LOC contract.
A positive principal adjustment creates an LDT of disbursal type 'Principal Adjustment - Add' and a disbursal transaction distribution (DTD) of distribution type 'Principal Adjustment - Add'. A negative principal adjustment creates an LPT of payment type 'Principal Adjustment - Sub'.
In both cases, an OLT is created for the adjustment, which includes a reference to the LDT or the LPT. The Account Balance Details section in the contract details displays the current principal adjustments and remaining amounts. The Last Transaction Type field in the CL Contracts Details tab is updated to indicate that a loan principal adjustment was made, and whether it was an Add or Subtract action.
You can reverse a principal adjustment only through reversing the Other Loan Transaction. Attempting to reverse the adjustment through the LDT or LPT results in an error.
Prerequisites
The following are the prerequisites to adjusting the loan principal:
The loan is disbursed.
The loan status is Active-Good Standing status.
Steps
Perform the following steps to adjust the loan principal amount:
Log in to your Salesforce account.
Click CL Contracts.
Select the required CL Contract ID, and click Principal Adjustment.
Specify the required Transaction Amount.
Select a Principal Adjustment Reschedule Option.
Click Save to create a principal adjustment transaction.
Field reference
| Field Name | Description |
|---|---|
| Transaction Amount | This is the amount by which you want adjust the principal. A positive number is added to the existing principal, and a negative number is subtracted from the principal amount, to determine the new principal amount. |
| Change Payment Amount | Selecting this option changes the EMI but the loan term remains unchanged. |
| Keep Same Payment Amount | Selecting this option changes the loan term but the EMI remains unchanged. |