13.1.3.1 Specify Interest Calculation Parameters for Contract

From the Homepage, navigate to Loans and Commitment - Contract Input screen.

1. From the Loans and Commitment - Contract Input screen, click Installment Loan.
   The Installment Loan screen is displayed.

   Figure 13-3 Installment Loan

   
   

   
   Description of "Figure 13-3 Installment Loan"

   
   
2. The calculation parameters defined for the product gets defaulted to the contract. You can however, modify all the parameters except rate type. If the Rate Type is Fixed, you need to enter the interest rate based on which the system calculates the unearned interest amount.

Installment Details screen

After specifying the schedule details and interest calculation parameters, you can view the unearned interest amount details.

3. From the Schedules screen, click Unearned Interest
   The Installment Details screen is displayed.

   Figure 13-4 Installment Details

   
   

   
   Description of "Figure 13-4 Installment Details"

   
   

   The following details are displayed in the screen:
4. The following details are displayed in the screen:
   • Component: This is the main interest component.
   • Due Date: This indicates the date from which the system starts calculating the unearned interest amount.
   • Calculated Amount: This amount is calculated from the due date of the current period to the due date of the next period (if the period exists). If there are no more periods, the system calculates on the maturity date of the contract.
   • Status: This indicates whether the unearned calculation schedule has been processed

   Example

   Let us assume that you have disbursed an Annual Rest Loan with the following details:

   • Value Date: 1-Jan-2002
   • Tenor: 24 months
   • Maturity Date: 1-Jan-2004
   • Loan Amount: USD 50,000

   Unearned Interest Calculation Parameters

   • Rate Type: Fixed
   • Interest Rate: 5%
   • Interest Basis: Actual/360
   • Main Interest Component: MAIN_INT

   The interest payment schedules (P) and interest calculation schedule details (U) for the contract are as follows:

   Interest Calculation Schedule Due date (P)	Interest Payment Schedule Due Date (I)
   1-JAN-2002	1-APR-2002 1-JUL-2002 1-OCT-2002
   1-JAN-2003	1-APR-2003 1-JUL-2003 1-OCT-2003

   On 1^st January 2002, the system first calculates the unearned interest amount for one year (between 1-JAN-2002 and 1-JAN-2003) and allocate the amount to each payment schedule.

   Assuming that the current working date of your bank is 15^th March 2002, these values are displayed in the Unearned Interest Schedule Details screen:

   • Component: MAIN_INT
   • Due Date = 1-JAN-2002
   • Calculated Amount= (50,000x365x5)/(100x360) = 2534.72

   The system allocates this amount to the specified interest payment schedules.