4. Index Rates

4.1 Introduction

The Index Rates maintains your organization’s history of periodic changes in index rates as it applies to wholesale floor planning. It allows you to define the interest rate for the loans extended to the producers by type of credit line. The index rate provides the base rate for a credit line where:

interest rate = index rate + margin rate.

An index type can have different rates depending on the start date. For each index type, the Index Rates section records the interest rate and the start date after which the rate is applicable. If you do not want to use a variable index rate, you can use the flat rate index.

4.2 Index Rate Link

While you can add new rates for an existing index type, you cannot modify or delete existing index rates.

To use the Index Rates link

On the Oracle Financial Services Lending and Leasing home screen, click Setup > Setup > WFP > Index Rates

1. In the Index Types section, select the record you want to work with. Note: PRIME RATE and FLAT RATE are the default, system defined rate types.

   

Note the Following:

• If you choose, use Search Criteria to limit the display of records.
  • If you are entering a new record, click Add.
  • If you are changing an existing record, click Edit.

2. In the Index Types section, enter, view, or edit the following information

   In this field:	Do this:
   Index Type	Select the index type (required).
   Short Description	Enter the short description of the index rate type (required).
   Description	Enter the longer description of the index rate type (required).
   Enabled	Select to enable the index rate type.

3. In the Index Rates section, select the record you want to work with.

Note the following:

• If you choose, use Search Criteria to limit the display of index rates records.
• If you are entering a new record, click Add.

4. In the Index Rates section, enter the following information

   In this field:	Do this:
   Start Date	Enter the start date of the index rate. Note: This cannot be less than current date (required).
   Rates	Enter the rate. Note: For a particular index type, multiple rates cannot be entered in the Index Rates section with the same start date (required).
   Enabled	Select to enable the index rate.

5. Click Save in the Index Types section.

For example,

Using the data in the sample graphic, let’s assume the current date is February 5, 2009 (10/30/2008).

The entries in the Index Rates section for a prime rate include:

Start Date	Rate
01/29/2009	3.0
10/16/2008	12.0
10/03/2008	8.0

In this scenario 8.0% will be the rate used by Oracle Financial Services Lending and Leasing to compute interest on October 10, 2008.