Renew a loan

Renewals represent a large proportion of loans originated by banks and credit unions. Likewise, Q2 Origination supports creating renewal loan opportunities from existing booked loans imported into Salesforce from the bank's core system. The time span in which a credit report must be pulled for an existing borrower is defined by the financial institution's credit policy. Typically, in the case of a renewal, credit must be re-pulled and analyzed for each borrowing entity. The primary borrower of a loan does not change in a renewal instance. However, additional borrowing entities may be added to the loan during the renewal loan origination process. Terms of the loan can change during the renewal process; a loan can, for example, be renewed at a lower rate or an extended-term.

As part of loan renewal, lenders can map the loan number from the existing booked loan to the renewed loan. The prefix to the loan number indicates the chronology of the renewal; for example, in loan account number R2LAI120000123, R2 indicates that this is the second renewal of the loan whose original loan contract ID was LAI120000123. For a successful renewal, loan contract fields in the servicing application must be mapped to the corresponding fields in Q2 Origination except Product and Asset Class (these always map).

The fields that are typically mapped include term, payment frequency, rate type, loan amount, interest rate, margin, index, rate floor, and rate ceiling. These fields are explained in the Field Reference section below.

Interface tables are used to import loan records from the bank's core system into Q2 Origination. To renew the loan, the lender can select the Renew Loan button, which creates a new application record containing data from the loan.

The date of renewal is the effective start date of the renewed loan.

Prerequisites

Before you proceed to renew a loan, ensure that the following prerequisites are met:

• The loan contract numbering model is defined.

• The existing loan record is imported into Q2 Origination.

• The fields to be copied over to the new application are mapped between the bank's core system and Q2 Origination.

• The 'Use for Renewal' checkbox is selected in the conversion mapping setup.

Steps

To renew a loan:

1. Log in to your Salesforce account.
   

2. Select Interface Contract in the list of tabs.
   

3. Select the contract to be renewed.
   

4. Confirm the contract details, such as the loan amount (displayed in the Original Amount field) and the interest rate, and select Renew. 
   

   An application is created for the same product and product type.