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Object documentationEarly Payoff

 

Business object in Account Management (FS-AM) that you can use to trigger the early payoff of a loan. For more information, see Loans.

You can now perform a full payoff, or a partial payoff.

Full Payoff

You execute a full payoff by bringing the total outstanding balance (TOB) of a loan account down to zero through an announced, unscheduled payment.

If the borrower submits an inquiry about an early payoff of a loan, you create a payoff quote by creating and activating an order from the category early payoff. This payoff quote informs the borrower and the payment distribution system of the gross payoff amount. This comprises the following data:

  • Effective capital of the loan

  • Interest at due date

    Note Note

    If you have set the interest calculation condition up so that interest is calculated when settlement is triggered, unbilled interest that was due until the settlement run is displayed as interest under Overdue Items in the Gross Balance details during an incoming payment when an unscheduled settlement is triggered.

    End of the note.

  • Order charge for the early payoff

  • Rebate of insurance premiums

When you execute the order, the payment distribution system uses the incoming payment made by the customer to clear the balance of the loan account early.

Partial Payoff

You execute a partial payoff by reducing the total outstanding balance (TOB) of a loan account through an announced, unscheduled payment (with an option to decrease the term of the loan or decrease the installment amount).

You can now perform the following activities in the payoff process:

  • Create one or more partial payoff quotes

  • Execute partial payoff quote

  • Process payoff with Immediate execution (binding scenario)

  • Apply/suppress payoff event-based charges

Structure

The structure description of the Early Payoff function is divided into attributes, methods and customer enhancements. For more information, see Order Management.

Attributes

  • Description of reason for early payoff

  • Early payoff type (partial or full)

  • Currency of open items

  • Sum of open items

  • Prepayment penalty amount

  • Currency of prepayment penalty amount

  • Net payoff amount

  • Currency of net payoff amount

  • Amount of new installment for partial payoff

  • Currency of new installment

  • Behavior of payment plan change for partial payoff

  • Indicator to keep installment unchanged for payoff

  • Flag to indicate if open items must be included for payoff

  • Indicator to keep term unchanged for partial payoff

  • No charges for payoff

  • Payment plan change behavior

  • Payment date of payoff amount

  • Value date of early payoff

  • Gross amount of payoff quote

  • Reason for early payoff (Customizing)

  • Description of deactivation reason for early payoff

  • Description of reversal reason for early payoff

  • Tolerance days for advance payment

  • Tolerance days for back payment

  • Tolerance amount for overpayment (percentage)

  • Tolerance amount for overpayment (absolute)

  • Tolerance amount for overpayment (currency)

  • Tolerance amount for overpayment

  • Tolerance amount for underpayment (percentage)

  • Tolerance amount for underpayment (absolute)

  • Tolerance amount for underpayment (currency)

  • Tolerance amount for underpayment

  • Interest determined per day in payoff

  • Correspondence for activation

  • Correspondence for execution

  • Correspondence for deactivation

  • Correspondence for reversal

Methods

In Account Management (FS-AM), you can use one of the following channels for processing objects:

  • Dialog

  • Business Application Programming Interface (BAPI)s

  • Direct Input (DI)

  • Enterprise Services

Dialog

The Early Payoff function can use the Entry Origin or Processing Origin field to identify the channel used to process it. This can be the dialog channel for which the system displays the entry origin BOPAYF (Loan Payoff Dial.) You can call the dialog processing using transaction BCA_OR_PAYF.

You can call the following methods using dialog processing:

  • Create and enter

  • Create and activate

  • Change and enter

  • Change and delete

  • Change and activate

  • Change and deactivate

  • Change and reverse

  • Display

  • Display

Business Application Programming Interface

BAPIs are not available.

Direct Input

Direct input is not implemented for early payoff. The payment distribution system can reverse or execute the order using an RFC connection. The system displays BAPAYF (Loan Payoff-RFC) as the processing origin.

The methods can change the order status of the early payoff.

Enterprise Services

You can use enterprise services of the business object Loan Contract Payoff Request. For more information, see SAP Help Portal at http://help.sap.com/ -> SOA -> SAP for Industries -> SAP for Banking -> Enterprise Services for banking services from SAP.

Customer Enhancements

The Business Add-Ins (BAdIs) available for early payoff are in Customizing for Account Management (FS-AM), under Start of the navigation path Order Management Next navigation step Account Order Next navigation step Early Payoff (Loans) Next navigation step Business Add-Ins (BAdIs) End of the navigation path.

Integration

When you process early payoffs, the corresponding release object and authorization objects control the program flow.

The system calls the following Account Management (FS-AM) objects for processing:

Objects Checked by the System

The system checks the account and displays messages accordingly if one or more of the following requirements have not been met:

  • The loan account exists.

  • The contract status of the account is Active, Used.

  • The account is not In Release.

  • The account has the 0408 Early Payoff feature , the traffic light symbol is green and this feature is not locked.

    For more information, see Editing Features.

  • The system runs authorization checks.

  • You have entered all the required data.

  • The posting date is not in the past.

  • The value date is defined.

  • The payment date of the payoff amount is defined.

  • The due date for the order is outside of the rescission period for the loan account.

  • The outstanding net payoff amount is above zero.

  • The value date is within the term of the condition fixing agreement.

  • The payment date is within the term of the condition fixing agreement.

  • The payment date is a working day.

  • Is the gross partial payoff amount less than the total outstanding balance of the loan account?

  • Has the user the authority to create, to delete, to activate, to execute, to deactivate or to reverse the payoff order? (Function Authority check)

  • Has the user the authorization rights for the requested activity for the payoff? (Activity authorization check)

  • Is the user authorized in this organization? (Organization authorization check)

  • Has the user the authorization for the specified reason? (Payoff reason authorization check)

  • Is the payoff function called in create or change mode and is the loan account locked by another user?

  • Is the related account in the release workflow?

  • Is the payoff feature locked for this account?

  • Are fields set as required in product filled?

  • Is the due date empty?

  • Is the payment date empty?

  • Is the due date of the payoff order inside the statutory period of a rescission?

  • Is the payment date after the loan maturity date?

  • Is the value date outside the agreement period of the loan account?

  • Is the payment date outside the agreement period of the loan account?

  • Does the payment date conform to the calendar set in the account?

  • Does an active payoff order already exist with the same due date?

  • Does an active cancellation order already exist for the account?

  • Is the date of request earlier than the due date of the payoff?

Objects Changed by the System

The end date of agreement, condition fixing, and inpayment agreement are changed by the order on execution.

Objects Generated by the System

  • Change Document

    The system generates a change document that meets auditing requirements.

  • Work Item

    The system generates a work item for the release process, if required on the basis of the Customizing settings. For more information, see Release Object: OR_PAYF (Early Payoff).

  • Payment order for a bank transfer from the clearing account to the loan account on the basis of the incoming payment made by the borrower.

The end date of agreement, condition fixing, and inpayment agreement are changed by the order on execution.

  • The end date of agreement, condition fixing and inpayment agreement are changed by the order on execution. This triggers billing items for direct transfer to the account billing function.

  • Payment items for additional charges and insurance premiums

  • Payment order for the rebate of insurance premiums

  • A payment plan change order created if it is a partial payoff. The customer also has the option of executing the partial payoff without changing the payment plan.

  • Payment conditions for repayment are created during partial payoff.

  • Account closure

  • If required, the system generates correspondence for the following operations:

    • Activate

    • Deactivate

    • Execute

    • Reverse

Effect on Facilities in Master Contract Management (MCM)

When you execute this business transaction on a loan account in Loans Management, where the loan account is part of a facility, the system determines the resulting changes on the utilization calculation bases. If the change resulting from this transaction leads to an increase in the utilization of a facility, the system executes a facility check (such as a limit check). You can only proceed with this transaction if the facility check has been successful.

When you complete this business transaction, the system updates the facility utilization. If this business transaction leads to a decrease in the utilization of a facility, the system makes an update to the facility, but no facility check is required.

If a facility check is successful, an explicit reservation is created on the facility, and the update of the facility utilization after the successful execution of this business transaction corresponds to this explicit reservation.

A facility check applies to the entire facility hierarchy.

The following utilization calculation bases are affected:

  • Nominal capital

  • Effective capital plus prenotes

  • Remaining capital plus prenotes

For more information, see: Example: Paying Off a Loan