Setting up a pre-paid fee on loan or LOC product
You can add prepaid fees to the lending product definition to include any upfront charges on the loan or line of credit contract, which do not link to any event. For example, any origination fee, or charges for borrower verification. You can associate more than one prepaid fee with the lending product.
If you are upgrading from a previous version of CL Loan, you must update the LOC lending product page layout to add the Product Pre-Paid Fees section. For steps to do this, refer to section Pre-paid fee for LOC contracts.
Prerequisites
The following is the prerequisite to adding a pre-paid fee to a loan or LOC product:
- A fee with Time of Charge as Pre-Paid Fees is created.
Steps
Perform the following steps to set up a prepaid fee on a loan or LOC product:
Log in to your Salesforce account.
Click Lending Products and select the loan or LOC product.
Scroll down to the Product Pre-Paid Fees section.
Click New Product Pre-Paid Fee.
Select the Fee name. Only the fees with time of charge as Pre-Paid Fees are displayed for selection. For example, Verification Fee.
The lending product is displayed by default. If required, select the Lending Product.
Select the Amortize Balance. Select Pre-Paid Fees. This is applicable only for Protect enabled loans, and may impact any rebates on the protect fee offered to borrowers.
Select the Add Fee to Loan Amount checkbox if this amount is to be added to the loan amount.
Select the Enabled checkbox to enable this fee for use.
Click Save.
Field reference
Field | Description |
|---|---|
| Fee | The name of the pre-paid fee. |
| Lending Product | The loan or LOC product to which the pre-paid fee is attached. |
| Add Fee to Loan Amount | If this checkbox is selected, the prepaid fee amount is added to the loan amount. Else, it is deducted upfront. The borrower makes payment on the loan amount. For example, consider Financed Amount = 1000 and Prepaid fee = 200. Case A: Fee is added to loan amount. Then, Financed Amount = 1000 But, Loan Amount = 1200 (1000+200). Payment amount is calculated on 1200. Case B: Fee is not added to loan amount, and deducted upfront. Then, Financed Amount = 800 (1000-200) But, Loan Amount = 1000 Payment amount is calculated on 1000. |
| Enabled | If this checkbox is selected, it indicates that the fee is available for use. |