4.3.7 Maintain User Input Schedule Amounts
You can specify the payment schedule amount for amortized contract and adjust the
difference amount (if any) to the bullet schedule of the contract. To do this, you need
to maintain the following:
- The Allow User Input Installment field is available at the product level in the Product Preference screen. This box is enabled only for the schedule type Amortized. During contract maintenance, can maintain the installment amount for an amortized contact only if this box maintained at product level is enabled.
- The Installment Amount field is available in the Schedule Maintenance tab of the Contract Online screen and allows you to input the installment amount for amortized contracts.
- The following validations are performed for the Installment
Amount field in the Contract Maintenance
screen:
- This field is enabled only if the Allow User Input Installment box is selected at the product level.
- The Amount must be greater than zero and less than the contract amount. It should also be greater than the maximum schedule interest amount of the contract.
- System also validates that the bullet schedule has a non-zero principal schedule based on the user input installment amount.
- The Installment Amount specified is same for all schedules, however the bullet schedule may differ.
- The EMI computation function available in the system for amortized loan passes the upfront EMI entered by the user.
- The main interest component amount of each installment is computed based on the principal balance.
- The principal portion of the payment is derived as, Principal = user input installment– Interest component.
- The iteration of reducing the Principal Balance with the above mentioned Principal component continues till the penultimate schedule (assuming schedules are not exhausted before the bullet schedule).
- The Principal Component of the bullet schedule is derived based on the original loan amount and the total principal payout till the last calculated schedule.
Example
The below example explains the user input instalment schedules. Assume that you have disbursed a loan with the following details:
- Principal – 10,000 USD
- Interest Rate – 2.25%
- Contract Start Date – 01-Dec-04, First due date is 31-Dec-04
- Contract Maturity Date – 30-Nov-05
- Term / Tenor {In Years} – 1.00
- Basis of Tenor – 365
- Tenor Frequency – 12
- User input instalment EMI – 700 USD ( In case of system driven is 843.51)
| Schedule Sl. No | Date | Interest | Principal | Principal o/s | EMI |
|---|---|---|---|---|---|
| - | 1-Dec-04 | - | - | $10,000.00 | - |
| 1 | 31-Dec-04 | $19.11 | $680.89 | $9,319.11 | $700.00 |
| 2 | 31-Jan-05 | $17.81 | $682.19 | $8,636.92 | $700.00 |
| 3 | 28-Feb-05 | $14.91 | $685.09 | $7,951.83 | $700.00 |
| 4 | 31-Mar-05 | $15.20 | $684.80 | $7,267.02 | $700.00 |
| 5 | 30-Apr-05 | $13.44 | $686.56 | $6,580.46 | $700.00 |
| 6 | 31-May-05 | $12.57 | $687.43 | $5,893.04 | $700.00 |
| 7 | 30-Jun-05 | $10.90 | $689.10 | $5,203.93 | $700.00 |
| 8 | 31-Jul-05 | $9.94 | $690.06 | $4,513.88 | $700.00 |
| 9 | 31-Aug-05 | $8.63 | $691.37 | $3,822.50 | $700.00 |
| 10 | 30-Sep-05 | $7.07 | $692.93 | $3,129.57 | $700.00 |
| 11 | 31-Oct-05 | $5.98 | $694.02 | $2,435.55 | $700.00 |
| 12 | 30-Nov-05 | $4.50 | 2,435.56 | $0 | $2,440.06 |