# Extra Towards Options

### General

When making a payment in LoanPro, you have different options when it comes to "extra" payment amount. For example, if a borrower's payment comes due for the amount of $300.00 and the borrower makes a payment of$350.00, they paid $50.00 more than what is due. This "extra"$50.00 can be applied in different ways.

Note: Extra towards options will be different depending on if your interest is set to accrue between periods or between transactions. These options will be explained below.

#### Extra Towards

• Between Periods: For the interest application setting of "between periods", your options for "extra towards" are “principal only” and “next payment”.
• Principal only will apply the extra amount directly to principal. This will not affect the past-due calculation or the next payment amount on the loan. For example, if the “extra” amount is $10 and the next scheduled payment is$200, the next scheduled payment will still be $200. • Next payment will apply the “extra” amount to the next payment. The application date of the “extra” amount will be the same as the next scheduled payment date. For example, if the “extra” amount is$10 and the next payment comes due on July 1, $10 will apply to the loan on July 1. • Between Transactions: • Classic will apply the extra amount to any amount due on the account, the next due payment that has not been covered, and any remaining amount will be applied towards principal only (doesn't affect the amount of future payments until the end of the loan). • Principal will apply the extra amount towards principal on the loan. Extra towards principal differs from extra towards principal-only in that when you choose extra towards principal, the portion of the payment that exceeds the current amount due on the loan (the extra portion) will also reduce the amount due on future payments. For example, if$80.00 is due on the loan and the borrower pays $100.00, selecting extra towards principal will mean that after the payment applies, -$20.00 will show due on the loan, reducing the next payment due by $20.00. Using this option allows the borrower to pay ahead on the loan, meaning the following payments on the loan will be reduced by the extra principal paid. Future payments will not show as due until the due amount exceeds the extra principal amount paid. • Principal only will apply extra towards principal ONLY. This option will apply the extra amount towards principal only therefore lowering the principal balance by the extra amount. This will not affect/pay down the next payment unless the next payment is the final payment. For example, if$80.00 is due on the loan and the borrower pays $100.00, selecting extra towards principal only will mean that$80.00 will cover the amount due bringing the account current and \$20.00 will be posted as a principal only payment and the next payment will be due for the full amount.