Activate Loan Vs. Active Status Loan
Due to the complexity of the LoanPro system, there may be similar terminology that is applied to very different concepts. One particular circumstance that may cause confusion is the difference between an “Active” status loan and an “Activated Loan.” LoanPro lets you customize your loan statuses, but one of the default statuses is “Active,” and this may be a source of confusion.
Activate a Loan
Activating a loan is your way of telling LoanPro to proceed with the loan using the numbers you have entered. The numbers and terms will be locked-in, unless the loan is inactivated, which ensures the consistency of amortization. When the loan is activated, LoanPro recognizes actual dates (instead of looking at the loan term as a piece of time with a set length, but no specific dates associated with it). Activating a loan means that if scheduled payments have been missed, the account will be past due, and if payments are made late or early, interest will continue to be amortized (meaning calculations may change from the originally saved values), and LoanPro will display forecast payments only in the future of the current date. Note: Inactivated loans will still accrue interest if loan numbers have been entered in and the Save & Calculate button has been clicked. If the loan numbers have not been saved and calculated, no interest will accrue.
Some results of activating the loan are:
- loan terms will be locked
- late fees will be applied if future payments are missed
- the past-due amount and payoff amount will be calculated correctly
- you will have access to additional tools like Loan Modification, Advancements, Change Due Date, etc
“Active” as a default status is intended as the status of choice for loans that are actively being serviced. You can change the name of this status (if it’s too confusing) to something else, such as “Open.” Make any changes to the default loan statuses that you would like.
Tying it Together
Despite the similarity of these terms, it is possible to have an “Active” loan that has not been “Activated,” as being “Active” is merely a status applied to the loan for the purposes of tracking.