Adjusting Loan Amounts

You would issue ad hoc adjustments if you need to change a loan's payoff and/or current balance outside of the normal billing / payment functions.

An adjustment can:

• Reduce a loan's payoff balance.
• Reduce a loan's current balance (i.e., how much the customer thinks they currently owe).
• Reduce both the loan's payoff and current balance.

For adjustments that affect payoff amount only:

• These adjustments are used to change the principal owed, e.g., if an additional amount is loaned.
• The adjustment's adjustment type should reference the Payoff Amt = Adj / Current Amt = 0 FT algorithm.
• GL lines will be generated to reflect the change to principal.

For adjustments that reduce current amount only:

• These adjustments can be used to change the amount that the customer must pay as part of the next bill.
• The adjustment's adjustment type should reference the Payoff Amt = 0 / Current Amt = Adj Amount (no GL) FT algorithm.
• Typically, GL lines are not generated for FTs that only affect the customer's current balance. However, moneys must be transferred from long to short in the amount of the adjustment (as described above under Payoff Balance and Current Balance for Loans).

For adjustments that reduce both payoff and current amount:

• These adjustment types can be used to levy additional charges, such as late fees, or to correct interest calculations.
• The adjustment's adjustment type should reference the Payoff Amt = Adj / Current Amt = Adj FT algorithm.
• GL lines are generated to reflect the change to principal. In addition, GL lines must be generated to transfer money from long to short in the amount of the adjustment (as described above under Payoff Balance and Current Balance for Loans).