Paying off a line of credit
Overview
Loan payoff, or early repayment, occurs when a borrower completely repays the pending loan amount through a single payment. This is applicable for all lending products in CL Loan.
Payoff Tolerance
If the payoff payment amount is within the payoff tolerance limit, the loan goes to Active-Marked for Closure state. Payoff tolerance is the maximum amount that the system can allow to remain unpaid while paying off a loan. This applies to payoff done via the Payoff button and also any regular payment where the amount is at least (payoff - payoff tolerance). If a payment is a payoff, then the last accrual date (LAD) is set to the payoff date.
Total Payoff Amount
The total pay-off amount in CL Loan is calculated by adding:
Principal remaining
Interest remaining
Fees remaining
Interest accrued till the payoff date
For information on recording a loan payoff transaction, see the Record a Loan Pay-Off Payment section of this guide.
An LOC borrower can pay off the outstanding dues using the Payoff functionality. The payment is applied to all outstanding dues. However, the Payoff LPT does not cause the LOC status to be marked as Closed-Obligations met, except if the payoff happens after the draw period is over.
Payoff a Loan
Prerequisites
None.
Steps
Perform the following steps to pay off a loan :
Log in to your Salesforce account.
Select the required CL Contract ID.
Click Transactions.
Select Payments.
Click Loan Pay Off.
Select the required Payment mode. These can be any payment mode that you have set up, such as, Cash, Check, Wire, ACH to name a few.
Click Save. The status of the loan changes to Closed- obligations Met.
If any payoff fee is present in the loan's fee set, it is reflected in the total payoff amount when a payoff quote is generated. A charge is created for the same, which is satisfied through the payoff amount. After a successful loan payoff, the principal remaining, fees remaining, interest remaining, all become 0 (zero).