The Advanced Configuration section of the Setup Terms tab inside of each loan allows you to select important settings for your loan. These settings control things like interest accrual, accounting for discount, payment period length, and much more.
We understand that these settings can be complicated, so we'll break them down for you. This article will give a brief overview of each setting and provide a link to more in-depth information on each setting.
To view the Advanced Configuration settings, navigate to Account Setup > Setup Terms > Advanced Configuration inside of a loan. Please note that the loan must be inactivated to edit the Advanced Configuration settings.
Here's a breakdown of what each setting does:
This option lets you choose the loan type: Credit Limit, Flooring, Installment, or Lease.
This option lets you choose the category of the loan: Automobile, Real Estate, Consumer, or Other.
This option lets you specify the method to be used for calculating the interest portion of each payment.
This option lets you choose whether to split the principal portion of payments into principal and discount portions. The amount of principal that is considered discount for each payment will be determined by the Discount Calculation selection.
This option lets you specify how the discount portion of each payment should be calculated.
This option lets you choose between accruing interest based on the actual number of days in a year or based on a year composed of uniform payment periods.
This option lets you choose how the system deals with an irregular first payment period.
This option lets you choose how interest comes due on a loan.
This option lets you choose whether payments should come due at the beginning or end of a payment period. (The most common choice is End.)
This option lets you choose whether the last scheduled payment will remain the last payment (should there be any extra interest accrued on the loan). If you choose “Yes,” any extra interest accrued on the loan (due to late or missing payments, interest bearing fees, or escrow) will be added to the last scheduled payment. If you choose “No,” any extra interest accrued on the loan will be scheduled into additional payments (beyond the originally scheduled last payment).
This option lets you choose how many decimal places numbers get rounded to while doing loan calculations.
This option lets you enter an amount that will be subtracted from the final payment. This is typically used to match a payment schedule from a contract that came from another system. This amount will be subtracted first from the Interest portion of the final payment, then from the principal portion.
First Day Interest
This option lets you choose whether to charge interest on the contract date. (The most common choice is Yes.)
This option lets you choose whether to stop interest accrual when the date of the originally-calculated final payment has passed. If you do not select this option, interest will continue to accrue on the account after the original loan expiration date (if the loan is extended due to missing or late payments, etc.)
This option lets you choose from the Curtailment Date Templates you have created.
This option lets you choose from templates you’ve created that customize the payment schedule.
This option lets you choose how payments will apply to fees on the loan.
This option lets you choose if payments will apply based on the application date, or if they will apply based on the payment schedule.
Due on Business Days
This option lets you choose whether payments should only come due on business days and what to do about it if they don’t naturally fall on a business day. The options include:
This option lets you choose how the next due date on the loan will be calculated (only available when Interest Application is set to Between Transactions).
Max Interest Amount
This option lets you determine the maximum amount of interest you'd like to set on a loan. If your determined maximum amount of interest is higher than the finance charge (which is determined by the interest rate on the loan), the system will default to the finance charge. You can also select the 'Set as Finance Charge' checkbox, capping interest at the finance charge as it's calculated on this screen.
The Max Interest tool only works on loans that have a between-transactions interest application, and may conflict with tools like Schedule Roll or Smooth Payments.
You will usually make the same selections on these options for all your loans or a broad type of loan that you give. All of these options can be defaulted in the Settings > Defaults > New Loan > Loan Type Specific area of LoanPro. You can also set up preconfigured loans that will let you easily create loans with the correct settings and information.