Lending Ranges 

Use

This function determines the possible lending ranges for the assets (collateral objects).

 

Prerequisites

You must define the lending rates in the Implementation Guide (IMG) Customizing for the relevant collateral object types by choosing Collateral Management ® Object Management ® Collateral Objects. Alternatively, you can enter the lending rates when maintaining the master data for the individual collateral objects.

You must enter the lending rates in an ascending order. For example, lending rate two (2) must be greater than lending rate one (1).

 

Features

The system calculates the corresponding lending ranges for the individual lending rates for the collateral objects. The number of lending ranges therefore depends on the number of lending rates entered for the collateral objects.

 

Activities

The system calculates the lending ranges using one of the following equations:

Lending Range n = Lending value*Lending rate n / 100   Lending Range n+1 = (Lending value*Lending rate n+1) / 100 – Lending range n

 

Example

The following is an example of the calculation of lending ranges:

Lending value of the collateral object = 540          1.      Lending rate1 = 54% Lending range 1 = 540 * 54 / 100 = 291.6          2.      Lending rate 2 = 70% Lending range 2 = (540 * 70 / 100) – 291.6 = 86.4          3.      Lending rate 3 = 80% Lending range 3 = (540 * 80 / 100) – (291.6 + 86.4) = 54          4.      Lending rate 4 = 100% Lending range 4 = (540 * 100 / 100) – (291.6 + 86.4 + 54) = 108