5.2.4.5 Specifying the Amortize Details

You can specify the following details related to amortize contracts.

Installment Amount

Specify the installment amount for amortized contracts. This option is available only for the contract using the product which has the Allow user input installment flag is selected.

The system performs the following validations to this field:

• Amount should be greater than zero and less than the contract amount.
• The computed Interest amount of any of the amortize schedule should not exceed the Installment amount.
• Bullet schedule have non-zero principal schedule based on the user input installment amount during new contract booking. This is not validated during contract amendment.

Installment amount captured is same for all schedules and it may differ if:

• EMI computation function for amortized loan is modified to pass the upfront EMI you entered.
• Main interest component amount of each installment is computed based on the principal balance.

Principal is derived as Principal = user input installment– Interest component.

Allow Pre-Amortization Interest

Select this check box to indicate that the system should calculate the pre-amortization interest.

• If Allow pre-amortization interest flag is selected at the contract level:
  • Main Interest component has to be maintained at the product default schedules.
  • Schedule default for standalone Main interest component is blocked.
  • Defaulted Amortize schedules are deleted.
  • Main interest component schedule is allowed to maintain as the first schedule before the amortize schedules. Multiple schedules are not allowed for this component.
  • Only one schedule for main interest component is allowed before first amortize schedule. Components other than main interest component is not allowed to define before amortize schedules.
  • Redefinition of schedules is allowed. Overlapping of pre-EMI interest and Amortise schedules are not allowed and amortise schedules is not allowed on or before the pre-EMI interest schedule.
  • On redefinition of schedules, pre-EMI interest schedule date is considered as the amortization computation start date.
  • Redefinition of pre-EMI interest schedules is allowed on Contract Amendment provided there is no Paid Amortization schedule that exists in the contract.
  • For userinput installment amortization contracts, Interest and Principal Breakup of the Amortization schedules will undergo a change. However, the Amortization amount will be intact.
  • In case of System derived amortization, the redefinition of Pre-EMI Interest schedule changes the amortization amount.
• If this flag is not selected at the contract level, main interest component or any other component schedules are not allowed to maintain before the Amortise schedule.
• This flag is applicable for both User Installment and System derived Amortization contracts.
• On copying of contracts this flag value is not copied and it is defaulted as deselected.