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Table of Contents (Online Help)

Individual Loans Settings

At the Individual Loans tab, default and compulsory parameters for individual loans are defined for loan products to be used during the loan application process.

How to set the individual loans parameters

To set individual loans parameters you go to System->Configuration->Loan Product Settings->Individual Loan and the following page will be displayed:

• Loan Product: From the drop down select the loan product that you are making settings for, e.g., "Loans General".

Note that the settings are made uniquely for each loan product. This means that you have to make settings for each loan product separately.

• Loan Amount: Here, you enter the amount that you want to be displayed as the default loan amount at the Loan Application Entry, e.g., "100,000". If the check-box to the right is marked, the amount entered here will become compulsory, i.e., it will be automatically applied at the time of entering loan applications and will not be changeable.
• Annual Interest Rate: Enter the annual interest rate for this loan product, e.g., "36". This will be displayed as the default interest rate at loan application entry. If the check-box to the right is marked, the percentage will become compulsory and not changeable.
• Grace period (in days): Enter the number of days for the grace period (days given to clients before they actually start repayments), e.g., "7". These will be displayed as the default number of days at loan application entry when the corresponding loan product is selected. If the check-box next to this option is marked (on the right), the number of days indicated here will become compulsory for the selected loan product. 
• Installments: Enter the number of installments that you want to be displayed as the default at the loan application entry window. If the check-box to the right is marked, the number of installments entered here will become compulsory for the selected loan product.
• Installment Type: Loan Performer gives you several installment types that include; Daily, Weekly, Bi-weekly, Half-monthly, Four-weekly, Monthly, Two-monthly, Quarterly, Four-monthly, Five monthly, Semi-annual, Seven-monthly, Annual. From the drop down select the installment type that you want to use as the default type fort this loan product. If the check-box to the right is marked, the installment type selected will become the default and not changeable for the selected loan product.
• Int. Calculation: From the drop-down list choose the interest calculation method that you want to use as a default for this loan product at loan application entry. Loan Performer supports the several interest calculation methods: Flat Rate, Declining Balance Discounted, Declining Balance Amortization. If the check-box to right is marked, the selected interest calculation method will become compulsory for the loan product.
• Loan Commission (% of Loan) (if split into installments): If clients are charged a commission as a percentage based on the loan amount and this commission is divided into equal amounts to be paid with every installment, then enter here the applicable percentage which will be shown as the default loan commission at the Loan Application Entry window. If the check-box to the right is marked, the indicated percentage for loan commission will become compulsory and not changeable for the selected loan product.
• Minimum/Maximum Loan Amount: Define here a range within which the loan amount of a corresponding loan product will fall. At the loan application entry and at the Importation of loan applications, the data entry person will not be able to enter a loan amount that is outside the defined range. For group loans the amounts apply to a group member loan and not to the whole group loan.

The minimum/maximum amount set above gives the full range for the product and takes precedence over any other limits set else where in Loan Performer. Therefore what is defined at the Loan Cycles page and at Loan Entry should fall within this range.

• Minimum period of membership (in days) before disbursement is: Enter here a minimum number of days the client has to be registered with the institution in order to get a loan, e.g., "30". At the time of entering Loan Disbursement Loan Performer will check the client's registration date (see Clients) and will not allow disbursements to clients that have not been registered for required number of days.
• Maximum Grace Period Duration (in days): Enter the maximum allowed number of days to be given as grace period on loans, "999".

Note that these are the number of days that are given to clients before they actually start repayments.

• Activate validation of the loan amount per loan cycle: When this option is selected then, for each loan applied for Loan Performer will validate the amounts applied for against those set for the particular loan cycle.

Note that the loan cycles information should have been set at System->Administration->Loan Product settings->Loan Cycle.

• Up-front Interest Payment: Mark this check-box if your organisation allows upfront interest payments. With this option Loan Performer maintains the same number of installments and installment amounts however the interest component will be reflected in the first installment of the loan repayment schedule. So when a client makes a repayment, Loan Performer ensures that the interest component is completely repaid before the principal component is taken care of. If the check-box next to this option is marked (on the right), the option will become compulsory.

Note that this option works only with flat rate loans.

Example:

If you disburse a loan 100,000 /=at an annual interest rate of 36% per year for 6 months but with an upfront interest on a flat rate basis. The settings at Loan application will look as follows:

The repayment schedule generated shows that the first payment will only cover a small portion of principal payment and the entire interest payment while subsequent repayments will cover just the principal payments.

Note that here the total installment amount is the same for all installments.

• Calculate interest for grace period: Select this option if you want Loan Performer to calculate interest for the grace period as well and distribute it equally among all due installments. If the check-box next to this option is marked (on the right), the option will become compulsory. When this option is selected the Interest on grace period compounded; Interest to be paid also in Grace period and the Separate installment for interest in grace period fields become active.
  • Interest on grace period compounded: Mark this check-box, if the interest for the grace period is to be compounded. This means that the interest for the grace period is calculated and the resulting amount is added to the amount of principal. Then the interest on loan is calculated on that compounded amount.
  • Interest to be paid also in Grace period: This option only works in combination with the "Calculate interest in grace period" and selecting it means that all amount of interest for the grace period is to be paid with the first due installment. If the check-box next to this option is marked (on the right), the option will become compulsory.
  • Separate installment for interest in grace period: Activating this option means that Loan Performer will create an additional installment at the end of the grace period for repayment of the interest for that period. Grace period will be split according to installment days. In cases where the length of the grace period exceeds the installment period (e.g. grace period of 60 days and a monthly loan) we will have several separate installments for interest payments during the grace period.

• Interest deducted at disbursement: Mark this check-box if you want to deduct the whole amount of interest at disbursement. If the check-box next to this option is marked (on the right), the option will become compulsory.
  

Note that this option works only with flat rate loans.

• Interest Calculation in days: Mark this check-box if calculation of interest is done according to the number of days the loan is held (it is especially important for the loans on declining balance). If the check-box next to this option is marked (on the right), the option will become compulsory for all loans.
• Lump sum Up-Front Interest Payment: This option only works in combination with the "Up-front Interest Payment". If the option is selected the client will have to repay the whole interest amount with the first installment and then continue with the capital repayments. If the check-box next to this option is marked (on the right), the option will become compulsory.

• Minimum/Maximum Loan Period (Months): The range within which the loan period (in months) that this product will lay can be set here. At the Loan Application Entry, the data entry person will not be able to enter a loan with a period longer or less than the one is set here.

Click on the Save button to effect the settings and the Close button to exit the menu.

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