Cancel a Loan

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Cancel a Loan

Overview

It is possible that a loan is created incorrectly in a loan servicing system. In such a scenario, you may want to cancel the loan and reverse the effect of any transactions that might have been created. CL Loan provides the facility to do this.

Key Concepts

Borrower side
  • A loan can be canceled only when any payments or any principal adjustments made are reversed.
  • When a loan is canceled:
    • The status of the loan contract changes to Canceled.
    • An OLT (Other Loan Transaction) of the record type Loan Cancellation Record Type is created in the system.
    • A Loan Payment Transaction (LPT) of the type Cancelled is created with a transaction amount that is equal to the payoff amount.
    • All bills are marked satisfied, and the Payment Satisfied flag is marked true for all the bills.
    • IPTs are marked as paid.
    • All the Loan Disbursement Transactions (LDTs) and Disbursal Transaction Distributions (DTDs) existing in the loan are marked reversed thus enabling the reverse accounting of the disbursement transactions.
    • All the accrual entries existing in the loan are marked reversed thus enabling the reverse accounting of the accrual transactions.
Investor side
  • On the investor side, before a loan is to be canceled, you need to run the Investor Payout Reversal job to reverse any payouts done to the investor. This reverses the Investor Loan Transaction (ILT) that was created when an investor payout was done.
  • When a loan is canceled,
    • an Investor Loan Transaction of the amount equal to the payoff amount is created.
    • Investment Order (IO) gets deactivated, and the status of the IO changes to Cancelled. 
Note:
  • While canceling a loan, minimum interest amount is not considered in the payoff amount.
  • While canceling a simple loan or an FAMZ loan, the backdated LAD is not supported.

Steps to Cancel a Loan

Prerequisites

Before canceling a loan, ensure that the following prerequisites are met:

  • The loan is in any one of the following states:

    • Active - Good standing

    • Active - Bad standing

    • Approved

  • Any payments made are reversed.
  • Any principal adjustments done are reversed.

Steps

To cancel a loan:

  1. Log in to your Salesforce account.

  2. Click the (App Launcher).

  3. Search for CL Loan, and then click it.

  4. Click Contracts, and select the required CL Contract ID.

  5. In the Loan Quick Menu, click Loan Actions > Loan Cancellation.

  6. Specify the Transaction Date.

    Note:

    Transaction Date cannot be a date before the current system date.

  7. Click Save.

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