A curtailment is a payment on a flooring loan. Since flooring loan payments often come due with an irregular frequency and in irregular amounts, curtailment templates let you create a repayment schedule in a manual way instead of letting the system calculate it for you.
To create a new curtailment template, navigate to Settings > Loan > Setup New Loan > Curtailment Date Templates inside your company account.
Enter a name for the template in the Name field. To add a new curtailment, click Add Curtailment Date.
Adding a curtailment requires that you enter a number of days, this is the number of days since the contract date that the payment will fall. If you have entered previous curtailments for this template, it’s the number of days since the last curtailment.
For example, if you enter 10 into the Days field for your first curtailment, and 10 into the Days field for your second curtailment, and you create a loan with a contract date of 01/01/2017, the first payment will come due on 01/11/2017. The second payment will come due on 01/21/2017.
You also need to enter an amount for the curtailment. You can either enter a flat dollar amount, or a percentage of the total loan amount by clicking Amount or % Of Loan Amount respectively. Keep in mind that if you choose to enter a percentage of the loan amount, that will not equal the principal portion of the payment, but rather the full payment.
This means that if you gave a $1,000.00 loan and you enter 10% as the amount of the first payment, the first payment will be $100.00. Some portion of the $100.00 will be interest and some portion principal. The remaining loan balance will not be $900.00 because not all of the $100.00 first payment will apply to principal.
Once you’ve entered the days and amount for the curtailment, click Save.
After you enter all the curtailments you want for the template, click Save. You are done!
You can use curtailment templates in the loan terms area when setting up a loan.