Configuring a lending product

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Configuring a lending product

Lending Product defines the rules, default settings, and constraints for a financial institution's lending offerings. A lending product acts as a template for multiple loan accounts which receives its default values while creating a loan application. In CL Loan Setup wizard, you can create or edit the existing lending products by selecting the following lending product types:

  • Amortization Based Loan
  • Line of Credit
  • Simple Lending Product

You can configure the following details for a lending product: Profile, Fees, Term, Interest, Protect, Funding, Tolerance, and Accounting. The following section illustrates the steps to configure the Profile details for a lending product.

Prerequisites

None

Steps

Perform the following steps to configure the lending product profile:

  1. Specify the Loan Product Name. For example, Simple Loan, or Personal Loan.
  2. Select the Billing Method to calculate interest on the contract.
  3. Select the Payment Frequency on a contract. For example, Daily Weekly, or Monthly.
  4. Select the Time Counting Method. This is based on the number of days in a year for calculating the interest on the contract.
  5. Select the Accrual Start Basis. This indicates whether, the accrual starts on the contract date or from the disbursal date.
  6. Select the Payment Application Mode. This indicates how the payments are handled by the system.
  7. Select the Interest only Period. This indicates the number of payments that will have only the interest component and no principal component.
  8. Select the Actual Interest Only Periods checkbox to set the interest only payments to actual interest amounts during the interest only period. If this is blank, the system computes a single interest only amount for all interest only payments.
  9. Specify the Pre Bill Days. This indicates the number of days before the actual payment date that the dues (or bills) will be generated on the contract.
  10. Click Next to complete the setup of the profile.
    Navigate through each tab in the same manner to configure the remaining details for a lending product. Similarly, you can configure the various sections of this installer wizard.
    Note:

    You must navigate in the sequence of the tabs to complete the Lending Product setup.

  11. Click Submit on the last page.
    For more information about lending product, see Create a Lending Product.