6.4.3.5 Line of Credit

1. Enter or select the following details:
   • Currency
   • Product
   • Product Name
   • Profitability Curve Definition
   • Pricing Methodology
     • For Carded Pricing Methodology, select the Card Rate Definition.
     • For User Input Pricing Methodology, select the relevant details based on the Interest Rate Type you select.
   • Interest Rate Type
   • Fixed Rate (in %)
   • Floating Rate Benchmark
   • Spread (in bps)

   Figure 6-19 Line of Credit Product Type

   
   

   

   
   
2. Enter the following details for Line of Credit Product Type:

   Table 6-23 Line of Credit Product Type Fields and Descriptions

   Field	Description
   Start Date	Select the Start Date of the deal from the calendar.
   Maturity Tenure	Select the Date of Maturity for the deal either in Days or Months, or Years.
   Limit	Enter the credit limit.
   Interest Rate Type	Select the type of Interest Rate. Following are the options available: Fixed Floating Fixed and Floating
   Fixed Rate (in %)	Enter the fixed rate of interest. This option is available when the Pricing Method is selected as User Input.
   Fixed Rate Duration	Enter the Fixed Rate Duration either in Days, Months, or Years.
   Floating Rate Benchmark	Select the Floating Rate Benchmark from the drop-down list. Note: Floating Rate Benchmark is an interest rate benchmark, upon which, a floating-rate security or interest rate swap is based.
   Spread (in bps)	Enter the Spread in basis point for the deal. This option is available when the pricing method is selected as User Input. Note: The basis point is used commonly for calculating changes in interest rates, equity indexes, and the yield of a fixed-income security. It denotes a rate change in a financial instrument or the difference (spread) between two interest rates.
   Payment Type	Select the Payment Type. Following are the options available: Periodic: If periodic is selected, then the equal payment is done periodically by the customer. Schedule: If scheduled is selected, then enter the details of the payment schedule. Follow these steps to enter the details: Click the Browser button. The Payment Details window is displayed. Select the payment schedule details. Automatic Payment Schedule and Define Payment Schedule are the options available. Click OK. The schedule details are entered.
   Payment Frequency	Enter the frequency of payment for the deal in either Days, Months, or Years.
   Origination Fees	Enter the amount of fees or activation fees that have been charged for the deal.
   Annual Fees	Enter the annual amount of fees applicable for the account.

3. Line of Credit Specific Profitability Drivers Table: Enter the following Line of Credit Specific Profitability Drivers along with other Profitability Drivers.

   Table 6-24 Line of Credit Specific Profitability Drivers Table Fields and Descriptions

   Field	Description
   Utilization Rate %	This is the utilization rate against the account. This can be captured by three different approaches as explained in the Miscellaneous Fees field.
   Revolve Rate %	This is the Revolve Rate against the account. This can be captured by three different approaches as explained in the Miscellaneous Fees field.