Loan Performer allows you to set different interest rates for the a running loan on declining balance arising as a result of changes in the Commercial Borrowing Rate (CBR) usually set by the Central bank.
Loan Performer also offers the flexibility of adding, modifying or deleting the variable interest rates as explained below.
How to set variable interest rates
To set variable interest rates you go to Support Files/Variable Interest Rates and a screen like the one below appears:
Click on the Add button to add the new interest rate and repeat this for all rates that you want to register.
Then click on the Close command button to exit.
How the variable interest rate affects a running loan:
Note that Any loan on declining balance paid with in the date range of the variable interest rates will be paid at the rate of the variable interest rates. As long as the "Always recalculate interest at repayment if declining balance" has been activated.
The last installment due of the loan below is at 20% before recalculation. Giving an interest amount of 11,396.80 before repayment.
Much as the interest rate of the loan below is at 20%, the variable interest rate is set at 40% from 02/08/2017 onwards with the option "Always recalculate interest at repayment if declining balance" activated the last installment fell due on 01/09/2017 within the date range when the variable interest rate is effected.
There fore the variable interest rate takes precedence over the earlier interest rate and interest is computed at 40% giving rise to an interest amount of 22,058.32 at repayment. See the Loan Ledger card
Much as the interest rate of the loan below is at 20%, the variable interest rate is set at 40% from 02/08/2017 onwards with the options "Always recalculate interest at repayment if declining balance" and When "Use declining balance compounded method to calculate interest" both activated. The installment falls due on 01/05/2017 but is paid on 15/05/2017
The variable interest rate take precedence over the earlier interest rates and interest is computed at 40% interest rate using use declining balance compounded method giving rise to an interest amount of 154.251.07 at repayment. See the Loan Ledger card.
How to delete /modify the variable interest rates
To delete/modify interest rates you go to Support Files/Variable Interest Rates and a screen like the one below shows up:
From the list of the displayed Interest Rates in the scroll space, click on the rate that you want to delete/modify. The variables for the selected rate will be displayed in the various interest rate parameter text boxes.
Click on theClose button to exit the menu.
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