Custom payment schedules
From simple monthly payments to complex, irregular schedules, LoanPro gives you the tools to easily configure payment and amortization schedules.
LoanPro offers features that can accommodate all types of accounts and payment schedules. If you’re creating a new loan these tools can help you design the payment schedule to fit your needs, or if you are matching a pre-existing loan, these tools will help you match the contract and previous payments that are already in place. This article will cover the following topics:
- Payment frequencies
- Amortization
- Configurable payment schedule
- Smooth payments
- Round payments
Payment frequencies
LoanPro offers many payment frequency options. The frequency determines how far apart payments come due. In conjunction with the loan term, they also determine the length of the loan. The frequency is determined during the loan setup and will influence the payment schedule. You can view the payment frequency on an existing loan by navigating to the account then clicking Account Setup > Setup Terms.
Each of the frequency options are outlined below:
| Frequency | Description |
| Monthly | This is the most common payment frequency. When this frequency is chosen payments occur on the same day of each month. The only exception to this is if the payment falls on the last day of the month, or if it falls on a day that isn't present in all months (i.e. February). If you so choose, the payment will fall on the last day of the month. If the payment is usually on the 30th of the month, it will fall on the 28th in February (29th for leap years). |
| Weekly | Weekly payments occur every 7 days. |
| Bi-Weekly | Bi-Weekly payments occur every 14 days. |
| Semi-Monthly |
Semi-Monthly payments occur every half month. The simple calculation of when the second payment of the month will come due can be done by adding 15 to the day of the first payment. For example, if the first payment occurs on the 1st, the second payment will occur on the 16th (1 + 15). This rule always assumes a 30-day month. So, if the first payment is on the 20th, the second payment will be on the 5th of the next month. If you choose to have the payment come due on the last day of the month, the next payment will come due on the 15th. Date pairs are chosen based on how APR is calculated. |
| Semi-Monthly Alternative |
There are only two differences between Semi-Monthly and Semi-Monthly Alternative:
All other dates are the same, as shown in the table below. When using Semi-Monthly Alt, APR is still calculated using the same method as Semi-Monthly. |
| Annually | This payment takes place once a year and on the same day of every year. |
| Semi-Annually | This payment takes place once every 6 months on the same day of the month. For example, if the first payment comes due on May 30th, the second payment will come due on November 30th. If the first payment comes due on the 29th, 30th, 31st of the month, and the second payment month doesn't have that many days, the second payment will come due on the last day of the month. |
| Quarterly | This payment takes place once every 3 months on the same day of the month. For example, if the first payment comes due on May 30th, the second payment will come due on August 30th. If the first payment comes due on the 29th, 30th, 31st of the month, and subsequent payment months don't have that many days, the payments will come due on the last day of the month. |
| Single | This payment frequency is used when only one payment will take place on an account. This will calculate odd days for APR differently than if you had just a single payment of another frequency. The payment will take place on the date specified as the first payment date. |
| Custom | Each custom option represents a number of days. Payments will take place in intervals of that number of days. |
Amortization
When creating a loan in LoanPro, the terms and settings you input will provide the calculator with everything it needs to amortize the loan. This creates the payment schedule and allows the borrower to have a clear understanding of their loan. You can view the basic amortization schedule of a loan when you are creating a new loan and click ‘Save and Calculate’ or navigate to the account then click Account Setup > Setup Terms. The TILA numbers will be displayed along with the payments.
In the example above, the payments all match exactly. In some cases there may be one unequal payment. This can happen when the first period is longer or shorter than a regular term in a loan. If this is what the loan should look like, there is no need to adjust it. However, if the payment schedule needs to be adjusted, you can use the tools in this article to change it.
Configurable payment schedule
Configurable Payment Schedule allows you to make adjustments to the loan to match the desired repayment schedule. Each tool is found in the account on the Account Setup Page under Schedule Tools.
Roll Schedule
The Roll Schedule Tool is a method to customize individual payment lines on a loan. This can be used to adjust payment amounts or interest rates for a specified amount of time on a loan. Each adjustment is a “schedule line”. You can create as many lines as you need to customize the schedule.
Within the loan, navigate to Account Setup > Setup Terms > Schedule Tools > Roll Schedule.
Inside the Roll Schedule page, select ‘New Schedule Line’. In the window, there are two tabs to choose from.
- Full: Offers the option for more settings and the ability to choose the ‘solve’ method. Best for complicated schedules that require unique solves.
- Simple: Easier to configure, does not require extra lines to revert to the previous schedule. Best for promotional offers or temporary changes.
Enter the following information:
| Field | Description |
|---|---|
| Term | This is the number of payment periods for which the rest of the settings for this current schedule line will apply. |
| Rate |
This option works in conjunction with the Amount field and will let you choose how the payment amount will be calculated for the payments in this schedule line. The options are:
|
| Solve Using | This field works in conjunction with the "Solve Using" field and the Type. Here you enter the balance, payment amount, or number of payment periods depending on your Solve Using and type selections. |
| Amount / Percentage / Payment Calculation Terms | This field works in conjunction with the "Solve Using" field and the Type. Here you enter the balance, payment amount, or number of payment periods depending on your Solve Using and type selections. |
| Type |
This option is only available if you choose Payment from the Solve Using drop-down. Your selection here can change the Amount/Percent/Payment Calc Terms field.
|
| Force Balloon Payment | This option lets you choose to force a balloon payment on the loan after the schedule line. This will mean that the next payment after the schedule line is completed will cover the entire outstanding amount on the loan at that point. |
Adding a line under the full tab will influence all payments from the date you selected until the end of the loan. If you would like to have the schedule revert to the original at some point, you will need to add another line that corrects the schedule.
If you would like to make a temporary change that reverts without adding extra lines, you can use the ‘Simple’ tab and select the ‘Overwrite Schedule Lines’ box. This will make the changes you have specified and then revert back to the original schedule after the line has been completed.
Smooth Payments
If you simply want your payments to be split evenly, you can use the Smooth Payments tool. This tool will use the Configurable Payment Schedule and the Round Schedule tool to make all payments an equal dollar amount. This tool is found in the account page under Account Setup > Setup Terms > Smooth.
There are three Smooth options to choose from:
- Smooth Payment Advance: Smooths the payment amount over the number of periods you entered for the account. The Smooth Payment Advance tool will only work with a whole-number loan term.
- Smooth Payment Basic: Smooths the payment amount over the number of periods that is most simple for the system to calculate. This option should take less time.
- Smooth Payment Advance No Round: Smooths the payment amount over the number of periods you have entered for the account without applying a schedule round. This setting will only work with a whole-number loan term.
Select one of the options and LoanPro will take actions.
Select one of the options and the LoanPro will take action.
It’s important to note that the payment amount will not work out perfectly. One penny added to each payment of a 24-month loan means that by the end of the loan, the customer will have paid an additional $0.24 on the account. Also, the account will not accrue interest on the extra money paid. This means that no matter what payment amount the system calculates, the total amount paid will likely be slightly different than the total interest and principal. Because of this, the Smooth Payment Advance option will usually round a small amount off the end of the loan to make the last payment uniform.
To see the round amount, navigate to the Advanced Configuration section of the Setup Terms tab.
The Smooth Payment Basic option, on the other hand, was designed to accommodate contracts from less sophisticated systems. Some systems merely add (or subtract) the difference in interest for an irregular first period to the account amount and then use that amount to calculate the payment amount. This is precisely what the Smooth Payment Basic feature does. It does not automatically implement the schedule round to remove the last payment, but you can do this manually, but this may not be necessary depending on which system generated the contract in the first place.
Round Payments
If you prefer to add your own round amount to the loan rather than using the generated amount with the Smooth Payments tools, you can use the ‘Round’ tool manually. This can be accessed in the loan setup or by clicking Schedule Tools > Round.
If the schedule has already been adjusted and applied a round, it will display in the window. If you would like to adjust it, simply enter the desired amount into the field and the software will add or subtract the amount from the loan to even out the payment schedule.
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