Record a Loan Pay-Off Payment
Overview
Loan Payoff refers to the complete repayment of a loan by a borrower, ahead of the loan maturity date. The loan payoff amount includes the payment of any interest that is owed, along with other fees that the borrower may have incurred, but not paid.
The payoff transaction is listed under the Payments sub tab of the Transactions tab of the loan contract. You can reverse the payoff transaction if required. For information on transaction reversal, see section Transaction Reversals.
If the borrower pays in excess of the payoff amount, you can create a transaction to refund the excess amount. For information on creating a refund transaction, see the Refund Excess Loan Closure Payment section.
Prerequisites
Before paying off a loan, ensure that the following prerequisite is met:
The loan is in Active status.
Steps
To pay off a loan:
Log in to your Salesforce account.
Click CL Contracts.
Select the required CL Contract ID.
Click Transactions.
Click Payment(s).
Click Loan PayOff. The Record a Pay-Off page is displayed. The Pay-Off check box is selected indicating a loan payoff transaction.
Specify the Transaction Date. This is the payoff date. The system calculates and displays the Payoff Amount as per the specified date. This includes the outstanding principal, accrued and unpaid interest, and any fee applicable.
Select the required Payment Mode. This can be any payment mode that you have set up. For example, cash, check, or ACH.
Specify any cheque or transaction Reference, if applicable.
Specify the Transaction Amount. This must be the same as the payoff amount, else an error message is displayed when you save the transaction.
Click Save. The status of the loan changes to Closed- Obligations Met. In the Account Balances section, the principal remaining, fees remaining, and interest remaining are all 0 (zero).
If Payoff Fee is present in the loan's fee set, a Payoff charge is created. The payoff quote that is generated includes the payoff fee amount.
Field Reference
| Field Name | Description |
|---|---|
| Pay Off | For a loan payoff transaction, this checkbox is auto selected, and you cannot deselect it. |
| Transaction Date | The date for which the loan payoff is to be recorded. Based on the date you select here, the system calculates the payoff amount. |
| Payment Mode | The mode of payment can be in the form of Cash, Check or through ACH or any other mode that you may have set up. |
| Reference | Any cheque or transaction reference applicable for the payoff payment. |
| Payoff Amount | The total payable by the borrower to pay off the loan on the specified transaction date. This includes the unpaid principal, accrued and unpaid interest, and applicable fees for the given date. If you change the transaction date, the payoff amount changes. |
| Transaction Amount |
The borrower payment amount. This must be same as the Payoff Amount in order to save the payoff transaction. If this is more than the payoff amount, it is considered as excess. You can create a transaction to refund the excess amount to the borrower. |