Percentage of credit limit

This billing method allows principal component of the bill to be calculated as a percentage of the total credit limit of the borrower. This option can be specified at the product and contract level, and the latter overrides the former.

For calculating the principal amount of the bill, the system consider the following conditions in the listed order of priority:

1. Is less than or equal to the Unbilled Principal.

2. Is the % of credit limit.

3. Is not less than the Minimum Bill Amount (if specified for the contract).

Example:

Credit limit = 10,000, Draw Term Payment % = 60, Minimum Bill Amount = 1000, and Billing Method = Percentage of Credit Limit.

If first disbursal = 5000, then, principal billed = 5000. Here, condition 1 is satisfied first. Condition 2 cannot be satisfied as the billed amount cannot exceed the disbursed amount.

Suppose after first disbursal of 5000, borrower repays 1000 before the bill is generated. Then, in effect, disbursed principal is reduced to 4000. Then, principal billed = 4000 to satisfy condition 1. Condition 2 is again not met.

If second disbursal = 3000, principal billed = 3000. Here, unbilled principal is only 3000. Again, condition 2 cannot be satisfied.

If credit limit = 10000, first disbursal = 6000, and draw term payment % = 60, then principal billed = 6000. All conditions are met in this case.