Definition

The product category Installment Loans (360) classifies short-term loans given to private customers to finance consumer goods as well as mid- to large-sized capital goods, such as cars, mobile homes, industrial goods, and real estate. You can use product types and products to map these loans according to your company’s requirements.

Installment loans are characterized by a set loan amount, which is usually disbursed to the borrower in a full disbursement at the beginning of the loan term. During the whole term of the loan through to the set end date the borrower repays the disbursed amount in the form of payment installments, which consist of interest, repayment of principal, and additional charges. The borrower can make repayments on the loan at any time.

Installment loans can be secured or unsecured. Often the borrower concludes voluntary insurance or required insurance policies for the installment loan.

At the beginning of the term for a loan you agree how the borrower will repay the loan, in constant monthly payment installments with a fixed interest rate, for example. The system supports the following repayment options, which are part of the relevant products.

The repayment option forms the basis of a projected payment plan in which the borrower will adhere to exact payment of all payment installments on the set payment date. The borrower receives bills for payments to be paid either at regular intervals or for a certain time period in advance. Payments are frequently received on a date different to that of the set payment date, however, by check using a lock box provider, for example.

The system can settle incoming payments by way of two principles:

For more information, see Incoming Payment/Payment Plan Principle .

Integration