Loan Terms

General

Entering the terms of a loan is very important.  LoanPro has a lot of features that can make this job easier, but it’s very important to enter the terms of any loan correctly.  This article will cover entering loan terms into LoanPro and each loan term individually.

How To

To enter loan terms in LoanPro, navigate to Account Setup > Setup Terms inside the loan.

In order to save the loan terms, you will need to click Save & Calculate . this will save the terms you’ve entered and calculate the finance charge, payment schedule, and APR based on those terms.  The following loan terms can be entered:
  • Total Amount
    • This is the total principal balance for the loan excluding any underwriting fees.
  • Discount
    • Also called lender’s fee, this is an amount held back when funding the loan that will be profit to the lender once the loan is repaid.  You can choose how this amount gets repaid in the  advanced configuration.
  • Interest Rate
    • This is the rate that will be used to calculate interest accrual on the loan.  This is not the same as  APR.
    • You can choose the time period over which the interest rate applies.  The options are: Annually, Semi-Annually, Monthly, Bi-Monthly, Weekly, and Bi-Weekly.
  • Underwriting/Refinance Fee
    • This is a fee charged to the borrower to get the loan.  This fee will be financed as part of the principal balance of the loan.
  • Contract Date
    • This is typically the date when the loan contract is signed and is used to mark the date when interest accrual will start on the loan.
  • First Payment Date
    • This is the date when the first payment will come due on the loan.
    • Note: You have the ability to change the first due date on the loan using the Change Due Date setup tool. If you do choose to change the first due date, it will affect the calculations on this loan; including the APR calculation that was set at the time of activation. If you wish to see the effects in real time, please use the Setup Terms tab to inactivate the loan and change the first due date. If you proceed this will have the “true” APR differ from the quoted one as shown on the Setup Terms tab.
    • Above this field, LoanPro displays the number of unit periods and the number of odd days.  These numbers are only important in the calculation of  APR, but if you’re familiar with how APR is calculated, they will help you understand the calculation method LoanPro is using.
    • To the right of this field, you will see a   icon. Click this icon to add additional  curtailment (payment) dates to your loan schedule.  This is most valuable for flooring loans when payment dates don’t occur on a regular frequency.  Additionally, there is a      icon.  Click this to apply a template of additional curtailment dates.
  • Payment Frequency
    • This is the frequency with which loan payments come due.
  • Term
    • This is the number of loan payments that will be made on the loan.  This means that the total length of the loan will depend on the payment frequency.  If the frequency is weekly and the term in 12, the loan will be scheduled to last 12 weeks.


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