10.7.3.3 Payment Method

The payment methods determine the payment amount for the payment event. There are six different methods.

The following table describes the different payment methods.

Table 10-2 Payment Methods

Method	Description
% of Original Balance	This method calculates the payment as a percentage of the original balance; the percentage being defined by the input percent. This method is useful for apportioning the starting balance on a level principal instrument over several payments. This method is only available for payment patterns defined with a level principal payment type.
% of Current Balance	This method calculates the payment as a percentage of the current balance before payment; the percentage being defined by the input percent. This method is only available for payment patterns defined with a level principal payment type.
% of Original Payment	This method calculates the payment as a percentage of the original payment column from the detailed instrument data. This percentage is defined by the input percent.
% of Current Payment	This method calculates the payment as a percentage of the previous payment; the percentage being defined by the input percent. This payment is calculated on the payment date based on the characteristics of the instrument at the time of the payment, including the current rate, current balance, and current payment frequency.
Absolute Payment	This is an input payment amount. This amount represents both principal and interest for a conventional payment type and represents only principal for a level principal payment type. For both types of patterns, absolute value payment amounts are entered as gross of participations.
Interest Only	This is a calculated payment amount. An interest-only payment is calculated during processing as balance times rate times accrual factor.