Roll Schedule Templates
Audience: Loan Servicer or Collector, Upper Management, Developers, Loan Servicing/Collections Managers, Administrator
A typical payment schedule is one that has similar payments and a single interest rate throughout. You may want to customize the payment schedule on your loan. Often, custom payment schedules are reused for certain types of loans within your company. Creating reusable, custom payment schedules is the purpose of roll schedule templates.
How Schedule Roll Works
Roll schedule and schedule roll are terms used in LoanPro to describe a change to the calculated payment schedule for a loan. Custom payment schedules are created one line at a time. Each line of a schedule roll lets you input the following:
This is the number of payment periods for which the rest of the settings for the current schedule line will apply
Annual Interest Rate
This is the interest rate that will apply over the term for this schedule line.
This option works in conjunction with the amount field and will let you choose how the payment amount will be calculated for the payments in this schedule line. See the options below.
This option is only available if you choose Payment from the Solve Using drop-down. Your selection here can change the Amount/Percent/Payment Calc Terms field. See the options below.
Force Balloon Payment
This option lets you choose to force a balloon payment on the loan after the schedule line. This will mean that the next payment after the schedule line is completed will cover the entire outstanding amount on the loan at that point.
Creating a Template
To create a new roll schedule template, navigate to Settings > Loan > Setup New Loan > Schedule Roll Templates.
Click Add to add a new template.
Enter a name for your template in the Name field. Click Add Template Line to add a new line to your schedule.
Enter a term, rate, and other applicable information for the schedule line. Click Save to save the schedule line.
You can enter as many schedule lines as you need to complete your payment schedule. If you don’t enter enough schedule lines to cover the term of the loan, the payment schedule after the schedule roll is exhausted will be like it was in the last schedule line for the schedule roll. You can also set the “Last as Final” drop-down to “Yes” to choose to make the last payment for this line grow or shrink to accommodate late or missed payments so it will truly be the last payment.
Once you have entered all the desired schedule lines for your Roll Schedule Template, click Save to save the template.
Let’s say that you regularly offer 12 month loans with a 3 month introductory interest rate of 5%, but after the first 3 months, the interest rate jumps to 15%. To make a schedule roll template to accomplish this, navigate to Settings > Loan > New Loan Setup > Roll Schedule Templates inside your company account. Click Add to create a new template.
Enter a name into the Name field. We will enter ‘3 Month 5% Promotion’ as the name of this template. Now click Add Template Line to add the first new schedule line.
Enter 3 for the term, since the introductory interest rate will last for 3 months. Enter 5 for the rate as the introductory 5% interest rate. Solve using Payment. Make sure you select Advanced Schedule from the Type drop-down. Since these loans are 12-month loans, we will enter 12 into the Payment Calc Terms box. You could actually choose from many different payment calculation options, but this will calculate the payment amount it would take to have 12 payments pay the loan off. Since these payments will have a 5% interest rate, they will be of a lower amount than the 15% payments. This lets the borrower see the benefit of the lower interest rate. Choose no for Force Balloon Payment and click Save.
Now click Add Template Line to enter the second schedule line.
For the second schedule line, enter a term of 9 since there will be 12 periods in this loan and 3 of them will be taken up by the first schedule line. Enter 15 as the rate, since the rate is going up to 15%. Choose to Solve Using Payment and choose Advanced Schedule from the Type drop-down. Enter Payment Calc Terms of 12. This should keep the loan at 12 payments since the interest was lower at the beginning than it is now, so all the principal should be paid by payments that are calculated at a higher interest rate for a 12-term loan.
Click Save to save the schedule line, then click Save to save the template.
You can now use this template on any loan. It will work correctly regardless of the loan amount.
While creating new roll schedule templates is an option, there are also some default schedules on every loan. In your loan, go to account set up, then select set up terms. Make sure the loan is inactivated to see the roll schedule tab. On the right side, click on the tab that says Schedule tools, then schedule roll. After you select schedule roll, click the tab that says Load. The drop down options will include schedule templates to pro-rate the first payment. These include:
- 1 - Prorate 1st Pmt Long Only
- 2 - Prorate 1st Pmt Short only
- 3- 1st Pmt All
You will also see default templates used to smooth the payment amounts over the life of the loan. These options include:
- 4 - Smooth Payment Advance
- 5 - Smooth Payment Basic
- 6 - Smooth Payment Advance - No Round
Prorate defaults allow the system to automatically increase or decrease the first payment amount based on irregularity of the first period. For example, if the contract date and the first payment date have 45 days between them, and the payment frequency is monthly, this would be classified as a 'long' first period. In contrast, if the contract date and first payment date have 20 days between them and the frequency is monthly, this would be classified as a 'short' first period.
- Prorate 1st Pmt Long Only: Use this if you have a longer first term.
- Prorate 1st Pmt Short Only: Use this if you have a shorter first term.
- Prorate 1st Pmt All: Use this if you want the software to calculate accordingly.
- Smooth Payment Advance – Smooths the payment amount over the number of periods you entered for the loan. The Smooth Payment Advance tool will only work with a whole-number loan term.
- Smooth Payment Basic – Smooths the payment amount over the number of periods that is most simple for the system to calculate. This option should take less time.
- Smooth Payment Advance – No Round – Smooths the payment amount over the number of periods you have entered for the loan without applying a schedule round. This setting will only work with a whole-number loan term.
Common Uses & Questions
When the payment schedule is non-standard, meaning payment amount changes, this makes it easy to use the schedule roll rather than recreate the schedule each time. Another thing to note, smooth payments also use roll template to smooth the payments equal.
Loan Servicer or Collector Use
Upper Management Use
Loan Servicing/Collections Managers Use
Can a schedule roll template calculate the payment amount in order to arrive at a certain loan balance at a certain time in the loan? Yes, payment amount can be calculated to get as close as possible to a specific principle balance at the end of that schedule line.
If I have schedule lines in my template with different interest rates, will my payment automatically increase based on the interest rate? No. An increase or decrease in the payment amount based on the interest rate is often referred to as payment recasting. Some lenders like to change interest rates regularly based on changes to prime rate, LIBOR, etc. LoanPro doesn't automatically adjust payment amount when the interest rate changes during the life of a loan. However, when creating a Schedule Roll or Schedule Roll template, interest rate and payment amount can be specified with each schedule line.
With an understanding of these templates, you're ready to Create a Schedule Roll. You might also be interested in these schedule roll features:
- Force Payments: You can use the force tool to create a schedule roll that automatically adjusts with a schedule round. This article will explain how to use force tool to set up a payment schedule.
- Smooth Payments: This tool smooths the payment amount over the number of periods that is most simple for the system to calculate. This option should take less time.