Simple Loan Contract Creation

Contract creation is the process of setting up a contract in CL Loan. Creating a contract includes recording all the parties to the agreement, key dates and related elements in the agreement that impact interactions between the lender and borrower. After the details have been recorded, the contract is reviewed and approved before disbursements and repayments can be made on it.

A simple loan may be funded through a one time disbursement of the complete loan amount, or it may be funded in tranches through partial disbursements.

In simple loans, borrowers have the option of holiday periods, defined through single or multiple holiday schedules in the loan contract, during which the bills and payment schedules are not generated. A holiday period may also be added post-contract creation by rescheduling the loan.  Similarly, you can provide the borrower a flexible repayment plan where the payment amount can be fixed for a specified number of payments. For this, the repayment procedure specified in the lending product must be Flexible.  As a variation of this, you can also specify incremental increase or decrease to the borrower payments by defining the Step Up schedule.  All these features are set up in the lending product and can be used as are, or modified at the contract level. For more information on these schedules, refer to section  Loan  in the CL Loan Administration Guide.