Set Up Payment Spreads

The borrowers' payment can be spread to define the order in which various balance types are paid. Payment spreads can be defined for each contract and transaction, enabling lenders to distribute the borrower payment differently during the life of a contract.

The default payment spread in CL Loan is aligned as fees, interest, and principal. This means, when a borrower payment is received, first the fee component of the bill amount is satisfied, then the interest payable and lastly, the principal. You can modify this sequence, and add more balance types, if the Enable New Spread org parameter is selected. Refer to the steps below to do this. In addition, as part of defining a spread, you can define the conditions under which a specific spread may be used. For example, for an Active-Good Standing loan, you may want to recover the fees, interest, and principal in that order, but for an Active-Bad Standing loan, you may want to recover the interest, fee and then principal.

The system picks up the default spread when no custom spread is defined.

Prerequisites

The following is a prerequisite to enabling definition of custom payment spread: 

• The user is a system administrator or has permissions to edit the org parameter settings.

Steps

Perform the following steps to enable definition of custom payment spread:

1. Log in to your Salesforce account. 

2. Click Setup.

3. Search and click on Custom Settings.

4. Search and Click on Org Parameters.

5. Click Manage.

6. Click Edit.

7. Check Enable New Spread option. This allows you to define custom payment spreads.

8. Click Save.

   You can now define custom payment spreads and the conditions under which a spread option may be used.