9.2.2.3 Amortization Redefine
Re-Amortization process allows you to re-defining the instalment schedules of an amortized contract as if maturity date of the contract has been extended for schedule re-calculation purpose.
Re-Amort Date - Specify a new maturity date greater than the current maturity date for calculating the amotization amount.
Re-Amortization is processed based on current principal outstanding balance. Instalment amount gets re-calculated based on the remaining schedules, and the new tenor, where tenor is considered between the Re-amort value date and the new end date. The installment schedules derived beyond the maturity date gets added up and parked in the bullet schedule, and thus results in high payment amount in the bullet schedule.
Re-amortization request placed in the middle of the cycle also considers the current schedule for re-amortization calculation. Back value dated re-amortization is allowed however the Value date of the re-amortization should not be earlier than the last liquidation date and also it should not be earlier than last re-amortization date.
Re-amortization processing happens during save operation from VAMI screen. You can delete un-authorized entry for a Re-amortization amendment details.
Rate change, CAMD, Principal amount change/maturity date change through VAMI have impact on EMI and the installment amount (and balloon payment on bullet schedule) is calculated based on the Re-Amort date.
Parent topic: Modifying Maturity Date