LoanPro specifically offers automatic late fees that will get logged on your customer accounts if the customer doesn’t make a payment before the grace period expires. Recurring charges let you set up automatic charges of your own. These charges will be assessed based on a loan event or a rule.
How To Create a Recurring Charge
To create a recurring charge, navigate to Settings > Loan > Charges > Recurring Charges inside your company account.
Here you can enter the data that will define your recurring charge in the top section. The bottom section lets you set restrictions so that this recurring charge will only be implemented on specific accounts. Restrictions are entered as a computation rule. To do this, click , and enter your rule in. The top options include:
- Title – The title of your recurring charge. The title should distinguish the charge from others you may create.
- Included In Past Due Calculations - This lets you choose whether the charge will contribute to the amount and days past due on the loan. If you choose "No", the charge will still come due, it just won't be part of the amount or days past due.
- Amount Calculation – This selection lets you choose how the charge amount should be calculated. The options are:
- Contingency – This option will tell the system to determine the fee amount based on whether the current principal balance, original principal amount, next due amount, or payment amount fall into a specified range. The contingency brackets of each of these four types can be edited at Settings > Loan > Charges > Contingency Brackets.
- Fixed – The fee amount will be a flat amount entered by you.
- Percentage – The fee amount will be a percentage of the amount past due, current principal balance, next due amount, next schedule payment amount, or original total loan amount depending on your selection.
- Charge Info – Any additional information you want to add for this charge.
- Trigger Type – This selection will determine the method the system will use to add the charge to an account. The options are:
- Daily Qualifying – Charge will be added to a customer account when the account is updated daily if it qualifies based on the rule entered for this charge.
- Event – Charge will be added to a customer account when a loan event occurs (i.e. change due date, loan activation, loan modification, loan origination, payment reversal – any reason, or payment reversal – NSF).
- Charge Amount – If the amount calculation is set to fixed, you can enter a charge amount into this field.
- Contingency Fee Bracket – This will show if the amount calculation is set to contingency. This option lets you select the bracket type for a contingency fee. The options are:
- Current Principal Balance
- Original Principal Amount
- Next Due Amount
- Payment Amount
- Percentage – This option is only available if Percentage is selected for the Amount Calculation. This is the numeric percentage of the fee. You will select the basis for the percentage from the Percentage Base drop-down.
- Percentage Base – This is the amount that the percentage is based on. The options are:
- Amount Past Due
- Current Principal Balance
- Next Due Amount
- Next Scheduled Payment Amount
- Original Total Loan Amount
- Charge Application Type – This selection determines when the charge will come due. The options are:
- Standard – The charge will come due on the day it is assessed on the account.
- Payoff Only – The charge will never come due on the loan, but must be paid in order to pay off the loan.
- Default Loan Setting – This option lets you choose whether this charge will be enabled or disabled by default on newly created loans.
- Loan Type – This option lets you filter which loan types this recurring charge will appear on.
- Charge Trigger – Here is where you will choose which rule will be used to determine if this charge should be assessed on a loan. Click Empty to assign a rule.
- Interest Bearing – This selection will determine whether interest will accrue on the charge.
You can also restrict which loans this charge will be assessed on using restriction groups. The bottom section lets you restrict by loan status, e-billing status, source company, loan aging, days past due, servicing user, and portfolios.
Using Recurring Charges in Customer Accounts
You can view how a recurring charge is set up for a specific customer account by navigating to Servicing > Charges > Recurring.
You will have three options for each charge. The first is to change the status of the charge for the loan using a toggle switch to make the charge active or inactive. The section is that you can clickto edit the charge. Finally, you can click to set the charge as Active/Inactive, or to force an evaluation of the trigger and, if it qualifies, add the charge to the account.
If you choose to edit the charge, the only thing you can change is the amount calculation and related options.
Using Recurring Charges for NSF Fees
You can use recurring charges to automatically charge NSF fees. To do this, you will need to choose a Trigger Type of "Event" and a Trigger Event of "Payment Reversal". You have several payment reversal options including:
- Insufficient Funds - This will trigger the fee if the reversal reason is Insufficient Funds.
- Non Insufficient Funds - This will trigger the fee if the reversal reason is not an R-Code or Insufficient Funds.
- Canada Return Codes - The Canada Return codes function the same as R-Code they are just for Canada.
- R Code - When using an R-Code in a payment reversal, you can choose to have the fee charged. If you choose this option, you can specify as many R-Codes as you want that will trigger this fee.