Handling excess payments made by the borrower

In case borrowers make payments in excess of the due amount on an LOC contract, which is even greater than the total principal remaining, the excess amount gets added to the borrower's available credit limit. The total available credit limit for disbursal, therefore, is increased by this excess amount. 

In case the excess payment results from the last transaction on an LOC, and is greater than the payoff quote, the excess amount is refunded to the borrower. A refund transaction is created and the status of the loan is changed to Closed-Obligations met.