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Object documentationLoans

 

A loan is an account that you use to map functions that are specific for a loan account in addition to all of the basic functions available for an account. For more information about accounts, see Account.

 

  • For loan products, you can use both the incoming payment principle and the payment plan principle to calculate the interest calculation capital.

    Note Note

    In Customizing under Create Account Product or Change Account Product, you create the principles in the attributes on product level under Settlement: General in the Work Rule field.

    The payment plan principle means that the interest calculation capital is decreased or increased only by expected payments (on the due date of the payment) regardless of the actual incoming payments. The interest calculation capital is decreased or increased only by manual orders such as disbursements or curtailments, and by condition-based flows such as planned payoffs.

    If you use the incoming payment principle, the interest calculation capital is only increased or reduced by the actual payments made.

    If products have the payment plan principle, interest on arrears is incurred for late payments. In products with the incoming payment principle, however, the interest share is shifted within the installment.

    Note that if the payment plan principle applies for a loan product, the Extend Payment and Skip Payment orders are not available. If the incoming payment principle applies for a loan product, then the Defer Payments and Capitalize Payments orders are not available.

    End of the note.

  • You can also use the product to define revolving loans, which are loans for which specific payoffs repeatedly increase the disbursement obligation of the loan.

    You can define rules to specify which payments are to have a revolving effect, which means you specify which turnover classes such as repayments, or unscheduled payoffs such as curtailments are included in the calculation of the available amount.

    Note Note

    You define the rules for revolving loans in Customizing under Define Turnover Classes for Available Amount. On the Posting Data tab page of the account, the system displays the rules assigned to the product, and you can change these rules if required.

    End of the note.

    Caution Caution

    The system supports revolving loans but it does not support the functional scope of a line of credit. Note that if accounts are settled on a daily or very frequent basis, as is the case with daily repayments and disbursements for revolving loans, the system generates a large number of settlement periods. This adversely affects system performance.

    End of the caution.

  • You can use a condition type to calculate a premium or a discount for an account. You can use the disbursement to the account holder to select a discount as a withholding or an open receivable. A premium is disbursed as a separate payment to the customer.

    Note Note

    In Customizing you must create two condition types (a price condition and a payment condition) under Define Condition Type.

    End of the note.

Structure

The following specific functions are available for loan accounts, which you use at different points in time over the lifecycle of a loan:

The following functions, which are executed regularly, are important for the management of loan accounts:

  • Account Billing

    You can use this function to schedule billing runs for a loan account and to bill the borrower for the due items (such as installments and charges).

  • Account Settlement

  • Payment Distribution

    You use these functions to clear the incoming payments made to the clearing account with the actual amounts to be paid and post these to the loan account.

You can use the following functions at any point during the lifecycle of a loan to display the current financial data for the loan, in addition to the loan master data.

The following functions are also available:

  • Insurance

    You use this function to enter information about the insurance for a loan account and to assign insurance policies to an account.

  • Annual interest statement

    You can use the Account Statement function to create an annual interest statement for the loan account. You use the Annual Interest Statement (BA32) correspondence type in this case.

  • Automatic Waivers

    You can use this function to waive interest and charges before they are debited to the customer.