5.2.4.9 Schedule Adjustments on Prepayment

The following schedule adjustments are performed for prepayment:

• Original installment amount is retained on prepayment. Outstanding schedules for principal component gets reduced starting with bullet schedule (LIFO process) and interest amount gets re-computed accordingly.
• If the pre-payment amount is enough to cover the bullet and prior schedules, then amount due for these schedules become zero without changing the maturity date.

Note:

Liqd int on prepaid principal flag is not applicable for any kind of payment of amortization contracts. Payment value date should fall on a schedule date of the Interest (AMORTISE component in case of Amortise schedule type Drawdowns) to do full prepayment of the contract.