Loans Are Service Agreements

Loans are initiated by creating a loan service agreement for a customer. The loan service agreement (and its SA type) contains the loan's terms, including the loan amount, periodic payment amount, the number of amortization periods, the interest rate, and the periodicity of the bills. Loan service agreements are just like other service agreements in many ways:

• The system bills the customer for the periodic payment amount using information on the service agreement.
• The customer pays the billed amount.
• If the customer doesn't pay, credit and collections may start a collection process to encourage the customer to pay (depending upon how the loan debt class has been set up on your system).

Loan service agreements differ from other service agreements in the following ways:

• Loans have interest charges.
• Loans have amortization schedules.
• Loan SAs are maintained on a separate transaction (refer to Loan - Main for more information).