Adding prepaid fees

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Adding prepaid fees

Pre-paid fee is the fee that can be charged to the customer before disbursal. Prepaid fee is added to the contracts created with that lending product. You can opt to include the fee as part of the loan amount using the Include Fee in Loan Amount checkbox in which case the loan amount increases by this amount. 

The fee amount is reduced from the disbursal amount at the time of disbursing the funds. For example, if Principal Disbursement is for 1000, and fee is calculated as 100, then two disbursal distributions are created. One for 900 towards the borrower, and one for 100 towards the fee amount.

In case of an LOC contract, the option to add the prepaid fee to the loan amount applies to only partial disbursements. In case of a full disbursal, this setting is ignored since the credit limit for the contract is fixed. If the LOC is disbursed using an API, selection of this option results in an error as the disbursal amount exceeds the credit limit.

You can select "Every Disbursal" in the Apply On picklist to apply the prepaid fee on each disbursement. However, in this case, the "Include Fee in Loan Amount" option must Not be selected. Depending on the fee calculation method provided on the fee associated with the prepaid fee, disbursal distributions are created for the disbursal amount. If the fee calculation method is "Percentage of disbursal amount", then on entering the loan disbursal transaction amount, you must regenerate the disbursal distributions.

If you are upgrading to CL Loan 2.500x from a CL Loan release earlier than 2.3007, you must enable addition of prepaid fees to LOC contracts. For steps to do this, refer to section Pre-paid Fee for LOC Contracts in the CL Loan Administration Guide. 

If you are upgrading to CL Loan 2.500x or later, you must add the Apply On picklist to the prepaid fee layout. For steps to do this, refer to section  Apply Prepaid Fee on Each Disbursal.

Prerequisites

  • A pre-paid fee is linked to the lending product.

Steps

Perform the following steps to populate fees for a CL contract:

  1. Create a loan or LOC Contract as given here.

  2. Scroll down to the Product Pre-Paid Fee section. The prepaid fees associated with the lending product are listed by default. You can retain or delete them, or add another prepaid fee to the contract.

  3. To add a pre-paid fee to the contract:

    1. Click New Product Pre-Paid Fee.

    2. Select the pre-paid Fee to add.

    3. Select the Add Fee to Loan Amount checkbox, if required.

    4. Click Save.

  4. To edit an existing pre-paid fee:

    1. Click Edit next to the fee you want to edit.

    2. Select a different Fee if required.

    3. Edit the Add Fee to Loan Amount checkbox, if required.

    4. Click Save.

Once the loan is disbursed, the Total Pre-Paid Fees amount is listed in the Funding section of the Details page. The detail of each pre-paid fee applied on the contract is provided in the Pre-Paid Fee tab at the bottom of the Details page.