Change the Payment Amount
The Change Payment Amount loan action allows you to change the future payment amounts for a loan. You can define the new payment amount as per the borrower’s preference, or have the system automatically compute it. In the former case, if the new payment amount is less than the current payment amount, any outstanding dues are settled in the last payment installment. If the new payment amount is higher, the loan terms are reduced and the loan finishes earlier. the loan maturity date and term is accordingly updated on the loan contract. The new payment amount must be greater than one payment cycle's interest. Else, an error is displayed.
In case of auto computation of payment amount, the system generates equal payment amounts as per the loan term. In case of amortization based loans, along with the payment amount, you also need to specify the number of payment terms. On preview, you can see the new repayment schedule along with the breakup of the repayment amount into principal and interest components.
While the change payment amount feature is a sub function of rescheduling a loan, simply changing the payment amount does not move an Active Bad Standing loan to Active Good Standing status. This is because payment amount change applies only to future payments and does not consider any existing unpaid dues of the borrower. To bring the loan to Active Good Standing, the borrower must pay the existing unpaid dues, which can include payments, fees or any other penalties. Else, any payment the borrower makes will first go towards clearing the outstanding amount, keeping the loan in Active Bad standing status till all the dues are cleared.
For example,
A customer has taken a loan of $10,000 on the following terms:
| Field | Values |
|---|---|
| Loan Amount | 10,000.00 |
| Interest Rate % | 10 |
| Loan Term | 24 Months |
| Repayment Amount | 461.45 |
Prerequisites
The following is the prerequisite to changing the payment amount:
The loan is in Active Good Standing or Active Bad Standing status.
Steps
Perform the following steps to change the payment amount:
Log in to your Salesforce account.
Click CL Contracts.
Select the required CL Contract ID.
In the Loan Quick Menu on the left, go to Loan actions, Payment Amount Change . In the page that appears, you can see the current payment amount.
Select the Auto Compute Payment Amount if you want the system to calculate the revised payment amount as per current outstanding balance and loan term.
Alternatively, specify the Payment Amount that the borrower has requested for. The system generates new payment amounts with the specified value. The last payment in the schedule includes the payment amount specified by the borrower and any outstanding dues and balances.
Click Preview to view the revised schedule.
Click Save.
Field reference
| Field Names | Description |
|---|---|
| Auto Compute Payment Amount | If you want the system to calculate equal payment amounts based on the outstanding principal, current interest rate and the remaining loan terms. |
| Payment Amount | The new payment amount requested by the borrower, for subsequent payments on the loan. |