Rate schedule setup

Using the Rate Schedule Setup you can define schedules that have flexible rate of interests - a combination of floating and fixed rates of interest. These schedules are defined for a  lending product that are defaulted to the contracts and can be modified there. You can use this feature to also define periods where you may not want to charge any interest to your borrowers. For this, you can create a row with interest rate as zero in the rate schedule.

Defining Flexible Rate Schedules for a Lending Product

1. Log in to your Salesforce account.

2. Click Servicing Configuration.

3. Go to Product > Product Management.

4. Click Rate Schedule Setup.

5. Select Loan Product in Product Type.

6. Associate the setup with a product as shown in the following image:

   

   The defined setup displays in the Interest Rate Schedule section of the product as shown in the following image:

   

7. Create a contract from the product that you associated with the flexible rate schedule setup. The set interest rate schedule appears under Schedules > Rate Schedule section.

   

Understanding the interest rate schedule for the contract

• A floating rate of interest is charged starting from November 12, 2018. This floating rate is calculated using the Floating Index Rate defined under Test Float (12%), Margin Rate (3%), and the monthly Rate Revision frequency (defined in a contract).

• Charged a fixed rate of interest of 15%, starting from December 17, for the rest of the terms.

Defining Flexible Rate Schedules for an Investment Product

The certificate rate is applied to an investment order as per the rate schedule defined for the associated lending product.

Prerequisites

The following is the prerequisite to define a flexible rate schedule for an investment product:

• An investment product is created.

  Note:

  To know how to create an investment product, refer to Investment Product.

Steps

Perform the following steps to define flexible rate schedules for an investment product:

1. Log in to your Salesforce account.

2. Click Servicing Configuration.

3. Go to Product > Product Management.

4. Click Rate Schedule Setup.

   The following page is displayed:

   

5. Specify the details as described in the following table, and then click Save.

   Field Name	Action
   Setup Rate Schedule for Product section
   Select Product Type	Select Investment Product.
   Setup Rate Schedule for Investment Product section
   Loan Product	Select an investment product.
   Interest Rate Schedule sub section
   Interest Rate	Specify the certificate rate for the selected investment product.
   Terms	Specify a number to indicate the period for the interest rate.
   Unit	Specify the unit for the terms specified. For example, Days, Weeks, Months, or Years.

   Note:

   You can add rate schedules by clicking Add.