Manual Transfer of Deposit Amount to Loan Account

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Manual Transfer of Deposit Amount to Loan Account

Overview

With the Mercury release, a borrower can transfer the amount from a deposit account to a loan account. Upon doing so, the payment toward the loan is decreased, and the contract is rescheduled. The amount in the deposit accounts also gets decreased. The amount from the deposit account is transferred in the ascending order (1 > 2 > 3) as per the priority of the deposit accounts. The deposit account having priority as Null is not considered while transferring the amount to the loan account.

Key Concepts

Reschedule

  • If the amount transferred from the deposit account is more than the Excess Threshold % for Reschedule specified during the creation of the lending product, the loan is automatically rescheduled. No job is needed to run to reschedule the loan.

Reversal

  • When the LPT of type Internal Transfer is reversed, the amount deposited in the loan account is reversed and is deposited to the deposit account from which it is deducted.

Backdated Payment

  • Backdated payment is supported till the latest Deposit Adjustment Date or the latest Deposit to Loan Transfer Date. If the Transaction Date is less than the latest Deposit Adjustment Date or the latest Deposit to Loan Transfer Date, the system throws an error.

    Example 1: On March 1, 2013, a contract is created with the deposit account. On April 3, 2013, an amount of $100 is transferred from the deposit account to the loan account. On April 8, 2013, an amount of $1,000 is deposited to the deposit account. So, the latest Deposit Adjustment Date is April 8, 2013.If the Transaction Date is less than April 8, 2013, then the system throws an error.

    Example 2:

    On March 1, 2013, a contract is created with the deposit account.On April 3, 2013, an amount of $100 is transferred from the deposit account to the loan account. So, the latest Deposit to Loan Transfer Date is April 3, 2013.If the Transaction Date is less than April 3, 2013, then the system throws an error.

Adjust Deposit to Payoff Flag

  • If this flag is enabled, the status of the loan changes to Active - Mark for Closure upon making the LPT transaction of the first billing amount.

Error Scenarios

The following are the scenarios when the system throws an error:

Scenario Error Message
1 The amount deposited to a loan account is more than the total deposit amount of the same account. Available Amount in Deposits is less than Payment Amount.
2 An amount of less than zero or equal to zero isdeposited from a deposit account to a loan account. Transaction amount should be greater than zero.
3 The Transaction Date < latest Deposit Adjustment date or the Transaction Date < latest Deposit to Loan Transfer date. Backdated payment is not supported beyond the latest deposit transaction date.

Transfer from the Deposit Accounts to the Loan Account

This section describes the concept of transferring an amount from the deposit accounts to the loan account. 

Prerequisites

To transfer an amount from the deposit accounts tothe loan account, following are the prerequisites:

  • A lending product is created with Payment Application Mode as Deposit.

  • Excess Threshold % for Reschedule is specified for the lending product.

  • A contract is created, approved, and the fund is disbursed.

About this Scenario

For better understanding, the concept is being explained with the help of the following example and with the set of instructions on how to go about it.

  • A contract is created, approved, and the fund is disbursed with the following terms and conditions:

    Loan Amount $10,000
    Interest Rate 10
    Term 10
    Interest Posting ON
    Payment Frequency Monthly
    Interest Posting Frequency Monthly
    Excess Threshold % for Reschedule 0.01
    Payment Application Mode Deposit
    Reschedule Option on Excess Payment Change Payment Amount

    Deposit Details

    		 DEPOSIT AMOUNT $500 $2,500
    DEPOSIT RATE 5% 5%
    PRIORITY 1 2

Steps

To transfer an amount from the deposit accounts to the loan account, perform the following steps:

  1. Log in to your Salesforce account.

  2. Click theApp Launcher.

  3. Search forCL Loan, and then click it.

  4. Click the CL Contracts tab, and then from the list of contracts, select the required CL Contract ID.

  5. Go to Loan Quick Menu>Loan Actions>Deposit to Loan Transfer.

  6. In theDeposit To Loan Transferwindow, perform the following actions, and then clickSave:

    6.1. Specify the date on which you want to transfer the amount from the deposit account to the loan account.

    Note:

    The Transaction Date should not be < the latest Deposit Adjustment Date or the latest Deposit to Loan Transfer Date.

    6.2. Specify an amount that you want to deposit to the loan account.

    Note:

    The amount should be <= theTotal Deposit Amount. The Total Deposit Amount is the sum of all the amounts available in the deposit accounts associated with the loan.

    Upon transfer, the amount is depositedtothe loan account, an OLT of the type Reschedule is created, and the loan is rescheduled automatically. An LPT of Payment Mode as Internal Transfer and Payment Type as Deposit Payment is created.

  7. To view the current deposit amount of the deposit accounts, on the CL Contracts tab, select the required CL Contract ID, and go to the Deposit Detailssection.The total deposit amount is reduced by $2,000. The updated amount in the deposit account with the priority as 1 is 0.00 and in the deposit account with the priority as 2 is $1,000.00(2,500 - 1,500).

  8. To view the OLTs, go to Transactions > Other(s).

  9. To view the LPT, go to Transactions > Payment(s).

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