How To Start A Loan Contract

Loan contracts are created using start / stop just like all other contracts. The start/stop transaction has special loan functionality that allows an operator to specify the contract-specific loan terms described above.

Creating a loan contract involves the following steps:

  • Search for the account for which you want to create a loan contract in the Start/Stop screen.
  • Enter a Start Date and a Start Method of Start a Contract.
  • Indicate the Division/ Contract Type of the loan contract and click the Start button.
  • After you click Start, the Start Confirmation page appears. When you select a loan contract type, the Start Confirmation page displays special fields that allow you to specify the loan's terms.

  • Enter the Loan Amount (the amount that the customer is borrowing). Note that the label for the Total Amount To Bill (e.g., Loan Amount) may appear differently depending on how the contract type was defined.

  • The system can automatically calculate either the payment amount (based on the loan amount and the payment periods) or the payment periods (based on the loan amount and the payment amount). Enter either the Payment Amount or the Payment Periods and click Calculate. Note that the label for the Recurring Charge (e.g., Payment Amount) may appear differently depending on how the contract type was defined.

  • Once the loan parameters are populated, click Start.

The loan is created in the pending start state. The next time the contract activation process runs, it will activate the loan contract. If you want to activate the loan immediately, navigate to the contract page and click Activate Contract.

Note: Overriding the Interest Rate. The Interest Rate is a display only field. The interest rate is taken from the value of the interest bill factor defined on the contract type. After starting a loan, you can manually override the interest rate using Loan - Main if the contract type allows it.
Note: Changing The Loan Amount. You can use loan maintenance to change the loan amount for an contract as long as the contract has not yet been activated. It may be helpful to transfer to Loan - Main, and verify the amortization schedule before activating the contract.