7.8.2 Defining Installment Schedules for Loans
Your bank may need to define a flexible repayment schedule for some customers who avail loans. The customer may need to repay fixed amounts on certain schedules, which you must adjust towards both interest and principal.
For such loans, with payment method as bearing, and normal schedules, you can define installment schedules. The amount repaid on the due date of an installment schedule is considered as inclusive of interest computed on the main component.
It is possible to have more than one installment schedule for a contract. To define
installment schedules, you must:
- Specify installment schedules as allowable, for the product, in the Product Preferences screen. Select the Allow Installment Schedule check box. When you do this, for any loan contract involving the product, you can define installment schedules.
- When you enter a loan contract using the product for which installment schedules are allowable, in the Contract Schedules screen, select Installment as the component, and specify the fixed amount being repaid. The interest payable on the main component is computed and deducted from the fixed amount, and the remaining portion is appropriated towards repayment of principal.
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