You can add additional charges to customer accounts for any number of reasons.  Some charges are used universally by lenders whereas others are more specific to certain lending operations. Whichever fee you want to assess, LoanPro has tools that help fees fit into your needs. This article goes over logging a charge on a loan and a line of credit. It will also cover convenience fees, one of the more common charges.

How a charge comes due

In the advanced configuration of the loan setup, there are two options to choose from:

• when they occur within the current or a past payment period
• when the due date of the charge is today or a previous date

There are a few options on each individual charge:

• The ‘Application’ option lets you specify if the charge will come due immediately or only when the loan is paid off.
• The ‘Include In Past Due Calculation’ option lets you choose if the charge will count towards the delinquency of a loan.
• The ‘Interest Bearing’ setting lets you choose to have interest accrue on the charge amount.

Setting charge types

In LMS you can categorize charges to keep track of why they were applied. The types themselves are up to you, and can be customized at the tenant-level; then, you'll select a type when you log a charge inside the system.

You can find your list of charge types by navigating to Settings > Loan > Charges > Types. You'll see a list of the five default charge types, as well as any others you've created. Click the 'Add' button to create a new type. That pulls up this window:

Enter the name of the charge type into the field provided. When you've entered a name, click 'Save'.
 

You'll notice that added charge types will have three icons in the far right column of their listing. (The five default charge types can’t be changed because they are needed to make other functions work properly.) For charge types you create, you will have the following options:

• Edit: Clicking this lets you rename the charge type.
• Delete: This removes the charge type from the system.
• Deactivate: When deactivated, a charge will no longer show in the list of charge types when a new charge is logged. If you want to add it back to the list, you'll just have to reactivate it.

Logging a charge on a loan

To log a charge on an account, navigate to Servicing > Charges within a loan. Click ‘Add’. You can enter the following data for a new charge:

• Amount: The amount that will be charged.
• Application Date: This is the date the charge will apply on the account.
• Type: The type of charge.  The list of charge types can be customized at Settings > Loan > Charges > Types in your company account.
• Info: This is a field where you can enter any additional charge info.
• Application: This selection determines when the charge will come due.  The options are:
  • Standard – The charge will come due on the Application Date (or on the first day of the payment period it falls into depending on your Fees Paid By setting on the account)
  • Payoff – The charge must be paid in order to pay off the loan, but won’t be due before then.
• Interest Bearing: This selection will determine whether interest will accrue on the charge.  The standard is not to accrue interest on charges.
• Include In Past Due Calculation: You can choose whether to include a charge in the days and amount past due calculation. These charges will still come due like other charges, they simply won't factor into the customer being past due.

Once you have entered the charge information, click ‘Save.’

Reversing a charge on a loan

If you need to reverse a charge, you can do so in the same Servicing > Charges tab inside of the loan. To reverse an active charge, click the back arrow. This will bring up a window asking for a comment.

Enter any information relevant to the charge reversal in the ‘Reversal Comment’ box and then select 'Reverse Charge'. Once reversed, it will now appear with a red background, distinguishing it from active charges. You can click on the title of the charge to expand additional information.

Export loan charges

At times, you may want to export the charges on a loan so you can run further analysis of the numbers in Excel or easily show the customer the charges that have been assessed. While there are reports for loan charges, the easiest way to get all the charges for a specific loan is from inside of that loan.

To export loan charges, navigate to Servicing > Charges inside the loan. Click the options button in the top right, and then click ‘Excel Data Dump’ from the menu. This will download a CSV file containing charge data to your computer.

Your web browser (typically Chrome, Firefox, Internet Explorer, Safari, Opera, or Edge) will determine where to save the file, or give you the choice to open it. CSV files can be opened by many applications, but most commonly they are used in spreadsheet programs like OpenOffice Calc, Microsoft Excel, or Apple Numbers.

Logging a charge on a line of credit

First, navigate to the line of credit account that you would like to log a charge on. The transactions table will be directly below the summary, and you should see a 'Log' button in the upper right corner.

Click on the 'Log' button and choose the type of transaction from the dropdown. In the following window, fill in this information: 

• Amount: The dollar amount of the fee assessed.
• Type: What type of charge it is (annual fee, convenience fee, etc). These are custom labels, set up at the tenant level.
• Info: A memo with any additional important information.
• Application date: The date when the fee was assessed and applied to the account.
• Bucket: The bucket that the fee is charged to.
• Interest bearing: This checkbox determines whether or not the charge will accrue interest. Federal and state laws usually govern the legality of charging interest on a charge, so make sure you are informed when you make this selection.

Once all of the relevant information has been entered, all you need to do is click the 'Save' button at the bottom right hand corner and the charge will be logged.

How charges affect accounts

Charges are added to a bucket, contributing to that bucket's balance. If the 'Interest Bearing' setting was turned on, charges will accrue interest at the same rate as other swipes in that bucket.

Convenience fees 

Convenience fee setting can be configured in loan defaults to meet the needs of your loan portfolio.

You have four options to choose from that will determine the amount of your convenience fee. You can charge a flat dollar amount, a percentage of the amount being paid, the lesser of a flat dollar amount or a percentage of the amount being paid, or the greater of a flat dollar amount or a percentage of the amount being paid. State and federal laws may govern the maximum amount you can charge and the type of fee you can charge.

Set defaults

You can set defaults for the convenience fee by navigating to Settings > Defaults > New Loan > Loan Type Specific, then specify the loan type for which you would like to set the default and select the green edit button in the top right corner. In the new window, go to the ‘Loan Settings’ section. When you're satisfied with the changes, click the save button in the top right.

You may also update convenience fee defaults by navigating to Settings > Defaults > New Loan > User Group Defaults. If a user has a User Group Default assigned, those defaults will override Loan Type Specific defaults when they are creating a loan.

Setting convenience fees for specific accounts

To update the convenience fee settings for a specific account navigate inside of the account to Loan Settings > Settings. Navigate to the ‘Convenience Fee’ section and click the pencil icon to edit. Here you will choose the type and the associated fields with that type.

You also have the option to change the convenience fee while making a payment on an account in the payment profile information screen (Servicing > Payment > Log Payment > Payment Profile Information). Selecting a payment profile will open the ‘Convenience Fee’ section below. If you want to waive the convenience fee, select the Waive Convenience Fee option in the Payment Profile Information tab.

Automatic payment service fee

You may select to charge a convenience fee with each AutoPay that is run on an account. To accomplish this, set the ‘Service Fee’ setting to "Yes, Charge Convenience Fee" while setting up the AutoPay. This setting can be found in the ‘Advanced Options’ of the AutoPay setup (Servicing > AutoPay > Schedule New AutoPay > AutoPay Info > Advanced Options).

If this is set to ‘Yes’, when the AutoPay is processed it will automatically be processed with the calculated convenience fee amount added to the payment amount, and a convenience fee will automatically be logged on the account for the correct amount.

Online payment service fee

You may choose to specifically charge service fees for payments made online. To turn on online payment service fees navigate to Settings > Website > Access Settings > Loan Access > GENERAL, then set ‘Charge Online Payment Fee to Customers’ to enabled. 

This will cause a service fee to be charged with every online payment made by customers. The payment will be automatically adjusted to the correct amount to cover the service fee being charged. However, if the service fee for a customer account has been set to a static amount of zero, no service fee will be charged with online payments made for that account.

Automatic payments set up by customers online will use the default AutoPay setting for service fee. This means that if the ‘Charge Online Payment Fee to Customers’ setting shown above has been disabled, service fees may still be charged for AutoPays that have been setup online if the AutoPay Service Fee default setting is yes. As previously mentioned, to adjust the default ‘Service Fee’ setting for AutoPays navigate to Settings > Defaults > Tools > AutoPay Defaults.