Editing Loan Conditions (SAP Library - Loans Management (FS-CML))

Editing Loan Conditions

Procedure

Basic Data

In the condition header, you enter the basic condition data for the current fixed-interest period:

Commitment capital (required entry)

Disbursement rate, in percent (required entry)

Note You vary the disbursement rate to enter a discount or premium.

Discount determination (required entry if the disbursement rate is not 100%)

You define the point at which the discount is calculated: The following options are available:

Determine total amount with first disbursement
Proportionate determination per partial disbursement
Determine total amount with last disbursement

Term

Period for which the loan is valid.

Fixed period

Required for generating the cash flow, the interest scale for the effective interest calculation and the interest and repayment schedule. It also fixes the effective period for the condition items.

Note

To ensure that the cash flow calculations for a loan are meaningful, make sure that you enter the loan term.

If you enter the fixed period end, the system only generates the cash flow up to this date. Otherwise, the cash flow is generated up to the end of the loan term (for a maximum of 20 years).

Only the data that falls within the cash management update period (CM) is stored on the database. You define the duration of the CM in Customizing for Loans by choosing Company Code-Dependent Settings for Product Type. The setting is made per company code and product type.

Repayment type

Repayment type 3 (annuity) considers all partial disbursements in the correct periods. By contrast, repayment type 6 (imputed annuity) assumes that the full contract capital is disbursed at the beginning of the annuity repayment. Repayment type 6 does not consider unscheduled repayments either.

Note

Repayment type 4 (perpetual annuity) is not supported.

Effective interest method (required entry)

There is a choice of 5 methods.

Interest calculation method (required entry)

There is a choice of 7 methods.

Note

Interest calculation method 7 (360/360) never considers the 31st of a month. If an interest period ends at the end of a month with 31 days, the system sets the period-end date back to the 30th, regardless of the inclusive ID chosen. This means that movements on the 31st of a month are only included in the following interest period.

Note

Use interest calculation method 1 instead of method 7.

Note

You can define default values for the effective interest method and interest calculation method in Customizing for Loans, by choosing Company Code-Dependent Settings per Product Type. However, these default values can be overwritten.

Contract / Effective Interest

Here you enter the special interest ID for calculating interest on arrears, for example, or an alternative effective interest rate.

Offer / Acceptance

Here you enter data about the progress of an offer, such as the date an offer was accepted.

Notice

In this section you enter the date on which the borrower cancels a loan as well as the earliest date at which the lender can cancel the loan unilaterally.

Condition Items

The following sections describe how to enter the individual condition types for loans.

The Customizing settings delivered with the system allow you to enter the condition types described.

Nominal interest

Interest rate adjustment

Event-based condition items

Condition Tables

The Condition table function allows you to assign predefined interest and repayment conditions to a loan. To create condition tables, choose Master Data ® New Business Table ® Create. See also: New Business Tables

To use an existing table:

Click on the Cond. table button at the bottom of the screen.
The Condition tables dialog box appears. Enter the table ID (Table), the table version (TableYYYYMM) and the sequential number for the table version (Table number).
The system displays another list with corresponding condition variants. Choose a variant. The system copies this variant to the conditions.

Notes for Processing

When you create a new loan, the system displays different condition items according to the entries you made in Customizing for the condition group. If a condition type was set to Hide in Customizing, it is not displayed, and you have to call it up by choosing Insert additional items.

If a condition item is not filled, it is no longer displayed in change mode. You can, however, insert the condition again by choosing Insert additional items.

Condition items always have the same currency as the contract.

A condition item is effective from the Eff. from date.

The effect of a condition item depends on the calculation category it is based on. Nominal interest, for instance, is not due until the first value date.

The validity of a condition item ends with the Eff. from date of the following condition item of the same condition type, or at the latest, at the end of the fixed period.

The first condition item is valid until the Eff. from date of the second position item.

Note

If the Eff. from date is before the start of the fixed period, a message appears.

Example

To enter a staggered interest rate, position the cursor on the corresponding condition item and choose Insert additional items. Enter the data for the following interest period.

Example

To suspend an interest payment one year before the final repayment, for example, you might enter a new condition item with the same condition type as a zero condition. Enter the Eff. from date for the zero condition and set the Condition form (CF) indicator to Zero condition.

Choose the Calculate cash flow button in the upper part of the screen to check your entries. In the cash flow you can see whether the entries result in the required flows.
When you save the loan, the system always checks whether the repayment conditions contain payment settlement information. For repayment conditions, activate the IS (immediate settlement) indicator, or enter an additional settlement condition (such as Ann.rep.sttl.).
If you want to enter a variable-interest loan, you need to enter both the condition item for nominal interest and a condition for interest rate adjustment. The interest rate adjustment condition determines when the interest rate is adjusted (by the Update Planned Records function).

Note

In order to generate the current values for foreign currency loans, loans based on reference interest rates or loans with incoming payments before you use certain application functions (such as Post Planned Records or Accrual/Deferral), you must update the planned records for these loans. You should run the planned record update before each debit position run, possibly even on a daily basis.

Once a loan has been disbursed, you need special authorization to change the conditions using the Change Contract function. After disbursement you can only change condition details that do not affect the financial structure of the loan without special authorization.

Payment Advice Data

Choose Edit ® Payment advice data to enter payment advices.

This function is often used to simulate a disbursement planned record to calculate the commitment interest due before the disbursement is made. This allows you to create various scenarios without having to trigger the disbursement function.

Enter the Flow type, the Due date and an Amount.

Choose Copy.

Choose Cash flow.

In the following dialog box, confirm that you want to use the payment advice data as the basis for the cash flow.

Example

If you choose No, the cash flow is displayed according to the conditions and the advice data is not considered. If records have already been written to the database, the system prompts you to specify whether the data should be read from the database. Let the system recalculate the cash flow.

The system displays the planned records for the disbursement and the commitment interest.

Payment Schedule

To display or print a list of the loan payments, choose Extras ® Payment schedule.

The payment schedule comprises the scheduled repayments and interest payments. The header contains general data relating to the loan and the individual condition items. The list displays all the interest payments, repayments, other repayments within the fixed interest period, as well as the outstanding balance.

Cash Flow

The cash flow contains all flow records (planned and actual records) in chronological order that are generated by the conditions of a financial transaction.

By calling up the cash flow, you can check whether your entries produce the desired flow records.