This chapter describes how to fund a loan.
This chapter covers the following topics:
Oracle Loans integrates with Oracle Payables to disburse funds to borrowers or third party closing companies when a loan is approved. Funding is available for direct loans only.
After the loan manager approves a loan application, the loan funding officer authorizes a funding advice to disburse funds from Payables. The funding advice can be generated automatically when the loan is approved or submitted manually. Loans allows only one funding advice for a loan.
Use an automatic funding advice if you want to automatically generate and submit a funding advice when the loan is approved and not allow any changes to funding information after loan approval.
Note: In multiple disbursement loans with disbursement conditions and funding option checkbox enabled, the funds will be disbursed only after the funding officer reviews to see the conditions are met.
Use a prioritized funding (manual) advice if you prioritize or schedule funding events to control cash flow, or want to select whether to fund on the loan approval date or the funding date. If your business process requires updates to payee information after a loan is approved, use prioritized funding.
Tip: Use the Funding Option check box on the Approvals page to select automatic funding advice.
Select a payment method for disbursing funds when you enter the payee information. Funds can be paid using payment methods supported by Oracle Payables, such as check, electronic funds transfer, and wire transfer.
Oracle Loans integrates with Oracle Payments for loan funding to borrowers and third party agencies. For further information on adding a payee, see: Adding a Payee. For detailed information, see: Oracle Payments Implementation Guide.
For loans with multiple disbursements, you can cancel remaining unpaid disbursements. Enter the reason for cancellation in the notes for the loan manager to consider your request.
Note: You can Cancel Disbursements only for Approved loans. Incomplete loans or loans pending approval can be rejected and hence the Cancel Disbursements button is unavailable.
Note: If the remaining disbursements of a loan are canceled, you can either collect all the previously disbursed funds or continue to bill fees and interest on the disbursed funds until paid off.
The following lists the steps in the funding process.
Loan agent completes loan application.
For automatic funding, Loan agent creates payee information, selects the Auto Funding check box, and submits the loan for approval
Loan manager approves the loan.
Loans automatically creates invoice in Oracle Payables.
Payables clerk reviews and validates the invoice.
Payables clerk processes invoice payment and disburses loan funds.
If an error occurs during invoice import or validation, Payables updates loan status to Funding Error.
Note: For prioritized funding, when the loans manager approves the loan, the loan application appears in the Dashboard's Funding Queue with a status of Approved. The loans manager then reviews the application and, creates the payee information in Funding, and clicks Submit to create the invoice in Oracle Payables.
Oracle Loans interacts with Oracle Payables to check the status of a funding advice and updates the loan status in Loans. When a funding advice disbursement is fully paid, Loans fetches data from Oracle Payables to update the loan status to Active and updates the Loan Start Date and Payment Start Date. For a description of all loan statuses, see Updating Loan Status.
When you create a loan application, you enter estimated dates for the loan start date and the first payment date. When a loan is fully funded and its status is Active, Loans updates these dates and establishes the funding date.
Loan Funding Date
Loans updates this date with the actual date funds were disbursed for the loan.
Loan Start Date
Loans updates this date to be the same as the Loan Funding Date.
Payment Start Date
The Payment Start Date must be later than the Loan Start Date. If Loans detects that the Payment Start Date entered on the loan application is earlier than the updated Loan Start Date when the loan is funded, it uses the following formula to update this date:
New Payment Start Date = New Loan Start Date + the number of days between the original Loan Start Date and Payment Start Date.