Posting and Capitalization of Investment Orders

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Posting and Capitalization of Investment Orders

When interest or fee is capitalized on a loan, the investors can also accrue the benefit of the capitalized interest or fee on their investments.

To implement this, Interest Posting, Interest Capitalization, and Fees Capitalization are enabled on Investment Orders.  A new job IO Interest Posting Job, is introduced that creates Investor Loan Transaction (ILT) of the type Interest Posting and of the type Fee Posting. It calculates and updates the interest posted, interest capitalized, and fee capitalized on the investment orders.

Posting and Capitalizing Investment Orders

Prerequisites

Following are the prerequisites to enable fee and interest posting and capitalization on investment orders:

  • Interest Posting is enabled for the loan.
  • Interest Posting is enabled for IO.
  • Capitalization is enabled for the loan.
  • Interest Capitalization for IO is enabled.
  • Fee Capitalization for IO is enabled.

Steps

Perform the following steps to enable fee and interest posting and capitalization on investment orders:

  1. Log in to your Salesforce account.

  2. Create a loan product.

  3. To enable capitalization for the IO, select the following checkboxes on the loan product page:

    • Interest Capitalization for IO

    • Fee Capitalization for IO

  4. Create a contract from this loan product.

  5. Set the interest posting frequency.

    Note:

    This frequency is used for both posting and capitalization, of both the loan and the investment orders on the loan.

  6. Disburse the loan.

  7. On the CL Contract page, click the Investors tab.

  8. In the Investment Orders section, click Investment Order Initial Setup.

  9. Specify the fractionalization details.

    Note:

    In the example, the loan has 1 investor with 100% investment.

  10. Click Save, and then click Activate.

  11. Run the IO Interest Posting Job. An Investor Loan Transaction (ILT) is created every time interest is posted or a fee is posted for the IO.

Example 1

Loan Amount = 5000

Certificate Rate = Interest Rate = 3%

Number of investors =1

Investment % = 100 %

Posting Frequency = Weekly

In this example, 4 ILTs are created in a month because the Interest Posting Frequency  is weekly as seen in the following image:

You can view the interest posted on the Investment Order page, under Posting Details section of the Details tab as seen in the following image:

The value of  Investment Order Balance is calculated as the sum of (Remaining IO Amount, Fee Capitalized, Interest Capitalized). For capitalized IOs, the interest is calculated on this field.

Example 2

Loan Amount = 26,000

Certificate Rate = Interest Rate = 10%

Number of investors =1

Investment % = 50 %

Posting Frequency = Monthly

In the following image, you can see the ILTs for Interest Posting and Fee Posting created:

You can view the fee posted on the Investment Order page, under Posting and Capitalization details section of the Details tab as seen in the following image:

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