Contingency brackets let you set the amount of recurring fees based on a range of different loan numbers (e.g. payment amount). This article will go over the types of contingency brackets and how to create and use a new bracket.
Types of Brackets
Current Principal Balance – This type of bracket lets you base fee amount on the principal balance on the loan at the time the fee is assessed.
Original Principal Base – This type of bracket lets you base fee amount on the original base principal amount. This is the original principal balance excluding any finance charges.
Next Due Amount – This type of bracket lets you base fee amount on the amount of the next payment that will due on the account.
Payment Amount – This type of bracket lets you base fee amount on the regular payment amount on the account.
How To Create New Brackets
To create a new contingency bracket navigate to Settings > Loan > Charges > Contingency Brackets inside your company account.
You can specify the following for the bracket:
- Start – This is the lowest dollar amount that will still qualify for this bracket.
- Stop – This is the highest dollar amount that will still qualify for this bracket. If you add a + after the number it will mean that amount or higher.
- Type – This is the type of the bracket: Current Principal Balance, Original Principal Base, Next Due Amount, or Payment Amount.
- Fee Amount – This is the amount of the fee that will be assessed on loans that fall into this bracket.
Click Save to save the bracket.
How To Use a Bracket
Now that you have created a bracket, let’s look at how to use it. Navigate to Settings > Loan > Charges > Recurring Charges inside your company account.
If you choose Contingency from the Amount Calculation drop-down, you will see a Contingency Fee Bracket drop-down. From that, you can choose one of the types of brackets. For example, if you choose Payment Amount, then when an account qualifies for this type of recurring charge, the system will check the payment amount on that loan to see which bracket it falls into. The amount of the fee will then be the amount specified in that bracket.