Defining a step up schedule

You can define step up schedules for a loan product, whereby, payment can be incrementally increased or decreased over the life of the contract. This change is applied over and above the interest rate of the contract and payments calculated as per that. Therefore, the step up schedule modifies the effective rate of interest for the contract. You can step up the schedule by a fixed amount or as a percentage of the principal remaining. This is determined by the Step Up Option selected while creating the product. 

For example, 

If the step up option is Percentage, step up factor is 0.2, and frequency is quarterly, this means that the payment is increased by 0.2% of the principal remaining every quarter.  

If the step up option is Amount, step up factor is 100, and frequency is quarterly, this means that the payment is increased by 100 every quarter.  

In case of a loan payoff, the payoff amount is calculated considering the step up schedule of the contract. 

At least one step up schedule must be defined in the product, to make the step up schedule feature available while creating or rescheduling a contract. In case a contract does not have any step up schedule, you can delete the schedule entry at the time of creation of contract.

If you are upgrading to CL Loan 2.3007 or later, you must add the step up schedule fields to the lending product and loan contract page layouts. For more information on updating the layouts, refer to section Step up schedule.

If you add a step up schedule to an existing loan product, it is available only to contracts created subsequently. Existing contracts are not impacted by this change to the lending product definition.

Prerequisites

The following are the prerequisites to defining a holiday schedule:

• Financial Calculator version is 3.1 or higher.
• Loan is a regular or amortization based loan.

Steps

Perform the following steps to define the holiday schedule:

1. Log in to your Salesforce account.

2. Click Lending Products.

3. Do one of the following:

   1. Click New and create the lending product and save it.

   2. Click the required lending product.

4.  Scroll down to the related lists and click StepUp Schedule.

5. Click New StepUp Schedule.

6. Specify the Sequence Name. This is mandatory else an error is displayed while saving the contract.

7. Specify the Sequence number of the schedule.

8. Specify the schedule Start Date.

9. Select the Frequency at which the payment must be stepped up. 

10. Select the Loan Product to which the step up schedule is attached.

11. Specify the Step Up Factor. This is the amount or percentage by which the payments must be stepped up.

12. Click Save or Save&New to define more schedules.

Field reference