Brief about Requirement: Variable Rate loans are loans that have interest rate linked to an Index. The Index rate gets revised periodically and the rate gets applied on the loan/ lease. This is applicable for both Fixed as well as Floating Rates. As a business user, you can apply rate lock to an index and specify the rate lock attribute.
Rate lock is an agreement between the borrower and the lender to lock the rate as of current date to get the benefit of the variations in the Index Rate.
Configuration
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Banks will offer rate lock only for certain products.
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Rate Lock Validity Period: A rate lock once opted for is valid for a certain period. If the contract is not funded within this period, the locked rate is no longer valid. This is usually captured in days.
Application Rate Lock
There must be a provision on the application to opt for rate lock. The net rate must be stamped on the application for the rate lock period.
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Rate Lock Period : The rate lock period determines the period for which the locked rate will be applicable for the loan contract. This is captured in Months
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Rate Lock Date : This is the date on which the borrower opted for rate lock.
Payment Schedule
The rate schedule in the payment schedule must get populated with the Rate lock period and the interest rate followed by the floating rate.
Prerequisite:
There are no prerequisite.
Steps
Perform the following steps to apply rate lock for an account:
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Log in to your Salesforce account.
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Select the App Launcher tab. Go to Q2 Originate.
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Select Rate Lock.
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Enter value for Rate Lock, select Apply.
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Select Save Member(s).
Upon the rate lock, the net rate is stamped on the application for the rate lock period.