Define a Holiday Schedule
You can specify holiday schedules in regular and amortized loan products and loan contracts during which no payments are due for collection. Amortization schedules are built skipping the Holiday Period defined in the loan. The EMI across all payment schedules is kept constant. This means that the installment amount to be paid before and after the holiday period remains unaffected due to the holiday schedule. The bill due dates follow the repayment schedule dates and hence no bills are generated during the holiday period, although interest is accrued as usual.
For example, loan term = 3 year
Payment start date is January 1, 2017 and end date is December 31, 2019.
The borrower is unable to pay during July to September each year. Therefore, borrower requests a payment holiday for these months.
The system generates payment schedule skipping the months of July, August and September of each year. It also adjusts the payment amounts of the remaining months accordingly.
If the borrower does not want the holiday period during the third year, lender can reschedule the loan to modify or remove the holiday schedule.
| If holiday schedule is | Then |
|---|---|
| Defined for the related loan product | You can retain it, modify it, or delete it while creating the contract. |
| Defined for a loan contract | You can modify it during a loan reschedule. |
| Falling within the interest only period of a loan | The payments are adjusted within the balance interest only terms. |
| Consuming the entire interest only period | The interest is recovered from the initial P+I payments. |
At least one holiday schedule must be defined at the product level to make it available for the contract.
Prerequisites
The following are the prerequisites for defining a holiday schedule:
The loan contract is for a regular or amortization based loan.
Financial Calculator version is 3.1 or higher.
Holiday Schedule is define for the related loan product.
Steps
Perform the following steps to define the holiday schedule for the loan contract:
In the contract that you are creating, review the default holiday schedule and click Edit to modify it, if required. To delete it, click the Remove icon.
Click Add to create another holiday schedule as follows:
Specify the Sequence number for the schedule.
Specify the holiday Start Date and End Date.
Select the Recurring checkbox if the holidays must be applied every year.
Click Validate to validate the schedule you entered, and then, Add to add more schedules.
To not apply any holiday schedule, delete the default schedule.
Field reference
| Field Name | Description |
|---|---|
Sequence | The sequence number of the schedule, in case multiple schedules are defined. |
| Start Date | The date starting which bills and payments must not be due on the contract. |
| End Date | The date up to which bills and payments must not be due on the contract. |
| Recurring | Indicates if the holiday must be applied each year. |