Regenerating the repayment schedule for loans funded in tranches
In CL Loan, lenders can fund the loans in tranches, the repayment schedule can be regenerated at the time of partial disbursal. Borrowers have the option to request for the repayment schedule to be based on the loan amount or the disbursed amount. This determines how the principal component of the EMI is calculated, since the interest is always calculated on the disbursed amount. However, once the loan is fully disbursed, the schedule cannot be regenerated.
For example, consider a loan as follows:
| Loan Amount | 10000 |
| Disbursed Amount | 2500 |
| Loan Term | 10 |
Now,
If the principal is calculated on the disbursed amount, then, the interest is calculated on 2500, and the principal is calculated on 2500.
If the EMI principal is calculated on the loan amount, then the interest is calculated on 2500 and the Principal is calculated on 10000
As part of regenerating the schedule, lenders can also modify the repayment start date. If any interest only payments are defined for the disbursal transaction, these reflect in the repayment schedule.
Loans funded in tranches (FIT)
When you reschedule a partially disbursed FIT loan having an interest only period:
Interest only EMIs are generated till the Principal Repayment Start Date specified on the contract.
P+I payments start from the principal repayment start date.
When EMI is calculated on Disbursed Amount:
Interest only and P+I, both EMIs are generated based on the disbursed amount, that is, principal remaining.
P+I schedule is generated for current loan term.
When EMI is calculated on the Loan Amount:
Interest is calculated based on disbursed amount or principal remaining for both interest only as well as P+I period.
For the P+I schedule, the Financial Calculator uses the EMI amount calculated on the loan amount and the interest as mentioned above, to create the schedule for the current loan term till principal remaining reduces to 0
Calculation of EMI Amount on total loan amount is possible only with Financial Calculator version 3.0 and higher.
Prerequisites
The following is the prerequisite to regenerating the repayment schedule:
The loan is funded in tranches, and is not yet fully disbursed.
Steps
Perform the following steps to regenerate the repayment schedule:
Log in to your Salesforce account.
Click CL Contracts.
Select a required CL Contract ID.
Click Repayment Schedule.
Click Regenerate Principal Interest Payment.
Specify the amount on which principal must be calculated. This can be either the Disbursed Amount or the Loan Contract Amount. If you choose Disbursed Amount, the principal and interest both are calculated only on the Disbursed Amount.
If you choose Loan Contract Amount, the interest is calculated only on the disbursed amount and the principal will be calculated on the Loan Contract Amount.
Optionally, modify the Repayment Start Date.
Click Validate for the system to verify the changes against the terms defined for the product and the contract.
Click Submit.
A confirmation message appears, Click OK.
The repayment schedule is generated and you can view the new repayment date. You can also view the amortization schedule on the same page. The principal is calculated as per the selection you made in step 5.
Field reference
| Field Name | Description |
|---|---|
| Repayment Schedule | The detailed outline of a borrower's loan application with the original loan amount, showing when the payments are due and how much of the payment goes towards the interest and principal repayment |
| Repayment Start Date | The date on which the loan repayment starts. The repayment start date must be later than the first installment date and the current system date. For example, If loan amount = 10000, Disbursed Amount … modify the repayment start date. |
| Principal Interest Payment. | The payment amount in which the interest is calculated on the principal. |