Use

This function processes overpayments made to a loan by executing or creating a payoff, or executing a rescission or a discharge.

You can only use this function for loans that are based on the product category Consumer Loans (340).

Integration

This function creates and/or activates and posts the following business operations:

Payoff for Consumer Loans (within the Workplac e for Business Operations )

Rescind Consumer Loan (within the function Change Consumer Loan )

Discharge Consumer Loan (within the function Change Consumer Loan )

Prerequisites

You need to have completed the following activities in Customizing for Loans Management :

Determine Tolerances under Automatic Processing of Overpayments for Consumer Loans

Define Amount Limit under Account Clearing

The limit amount indicates the amount by which an overpayment can fall short of the required payoff amount or the discharge amount, but still be processed as a payoff or a discharge of the loan by the system.

To create partial payoffs automatically, you must have set the following attributes for the product on which the loan is based.

Upper Limit for Automatic Payoffs as Absolute Amount

Upper Limit for Automatic Payoffs as Number of Payment Installments

Retain Term if Partial Payoff is Made

You define Products in the SAP Easy Access screen under Current Settings .

Features

The system only process loans with qualified overpayments. It does not process loans that are not released and/or loans with flow data to be released. Depending on the business operation affected, the system has the following response:

Payoff

If the system does not find a payoff, it uses the qualified overpayment to create a partial payoff up to the upper amount limit for the payoff defined in the product, provided that the payment method for the regular payment installments for the loan is not Direct Payer.

You can define the following attributes for the product:

Upper Limit for Automatic Payoffs as Absolute Amount

Upper Limit for Automatic Payoffs as Number of Payment Installments

The system uses the limit amount Credit from account clearing as the lower limit for the automatic creation of partial payoffs. The overpayment amount is copied to the net amount of the partial payoff.

If the system finds a relevant partial payoff in the status Entered or Activated , then it checks whether the overpayment is within the amount and due date tolerances you have defined in Customizing under Determine Tolerances for Partial Payoffs. The gross payoff amount is checked against the amount tolerance.

Partial payoff with Entered status

If the amount variance is within the tolerance amount, then the net amount is adjusted to the amount of the overpayment.

If the due date variance is within the tolerance, then the due date for the partial payoff is adjusted to the value date of the qualified overpayment.

Partial payoff with Activated status

If the amount and due date variances are within the tolerance, then the activated partial payoff is posted without adjusting the overpayment. Depending on the amount variance above or below the tolerance, residual receivables or overpayments are posted.

If the system finds a full payoff in the status Entered or Activated that meets the criteria, then it checks whether the overpayment is within the amount and due date tolerances you have defined in Customizing under Determine Tolerances for Full Payoffs. The amount tolerance that has been entered in Customizing is not considered in the event of a full payoff.

If the overpayment is larger than the gross amount of the payoff, then the full payoff and a residual overpayment are posted.

If the overpayment is lower than the gross amount of the full payoff, then a variance in the amount of the limit amount you defined in Customizing under Define Limit Amount for account clearing is considered. The full payoff and a residual receivable are posted.

Full payoff with Entered status

If the due date variance is within the tolerance, then the due date for the full payoff is adjusted to the value date of the qualified overpayment. The system recalculates the gross payoff amount because the interest portion changes.

The system only checks the limit amount for account clearing if the overpayment is smaller than the calculated gross amount of the full payoff.

Full payoff with Activated status

If the due date variance is within the tolerance then the activated full payoff is posted. The due date is not adjusted to the overpayment value date. The gross payoff amount is not recalculated.

If the system finds more than one payoff, it selects the payoff that corresponds the closest with the incoming overpayment in term of the tolerances and the tolerance sequence that you have defined in the IMG activity Determine Tolerances .

If the system finds more than one overpayment for a loan, it looks for a payoff that matches the total payoffs with the same payment date.

Rescission

If a rescission has been created for the loan, the system executes the rescission provided that the overpayment has been received within the Payoff Period in Days defined in the product and the amount is sufficient to clear the rescission balance. The system still posts the rescission if the amount of the overpayment is less than the rescission balance, provided that the difference is not greater than the limit amount defined in the IMG activity Define Amount Limit (Account Clearing) .

Discharge

If the loan is to be discharged the system executes the discharge.

The system still posts the rescission if the amount of the overpayment is less than the discharge amount, provided that the difference is not greater than the limit amount defined in the IMG activity Define Amount Limit (Account Clearing).

Activities

In the SAP Easy Access Menu chose Accounting → Bank Applications → Loans Management → Accounting → Receivables /Payables Management → Payment Postprocessing → Automatic Processing of Overpayments for Consumer Loans .

Enter your selection criteria and choose Execute.