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.
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
Note the Following:
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. |
Note the following:
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. |
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.