Log an Advancement/Credit
Advancements and credits directly affect the principal balance on a loan. Logging an advancement or credit may be necessary in the following circumstances: you are lending additional money to the customer and need to add the amount to the existing loan, you need to make an adjustment based on a promotional deal you made, or you need to make a miscellaneous adjustment to the principal balance.
To log an advancement or credit on a loan account, navigate to Account Setup > Setup Tools inside the loan account.
Make sure you are on the Advance/Credit tab inside the Setup Tools. Choose either Credits or Advancements.
Logging an Advancement
To create a new advancement, enter information on the advancement popup. The following options are available:
- Title – This is a title or name for the advancement. This title should distinguish this advancement from any other advancement logged on this account.
- Application Date – This is the date the advancement will apply on the loan. Since advancements add to the principal balance of the loan, this date is important because interest will accrue on the advancement amount starting on the Application Date.
- Amount – This is the amount of the advancement.
- Category – You will be required to enter a category for the advancement. The list of categories can be customized in Settings > Loan > Labeling > Advancement Categories.
Once you have entered the necessary information for your advancement, click 'Save'.
Logging a Credit
Since the use of credits can be somewhat confusing, logging a credit is more like answering a questionnaire. This will help ensure you are logging a credit when that is the best option. The questions are as follows:
- What is the reason/category for this credit?
- Select a credit category from the drop-down provided. If you don’t see an applicable reason/category, you can add one.
- Please enter a description/title for this credit
- The title should distinguish this from other credits on the account.
- Please enter the credit amount
- Enter a dollar amount for the credit.
- On which date should this credit apply?
- Enter the date that the credit will apply to the loan.
- In what order should the credit apply to the components of the loan (e.g. interest, principal, fees)?
- You can choose a payment application from the drop-down. If you don’t see the payment application you want, you can create one.
- Do you want this credit to apply as a charge off (choosing ‘Yes’ will have credit reporting consequences)?
- In addition to applying this credit to the account, do you ALSO want to reset the days & amount past due on the date the credit applies?
- If you choose ‘Yes’ here, the loan will be set to 0 days past due with a past-due balance of $0.00 on the day the credit applies.
Payoff Using Credits
You can use credits to pay off a loan. To do this, choose the Waterfall Application of "Payoff". This will populate the amount with today's payoff amount and the date with today's date. When you log the credit, it will bring the loan payoff to $0.00.
Once you have entered all of the necessary information for the credit, click 'Next'. You can now view a summary of the credit that you are logging.