Setup on Loan Management System

Loan Management System Parameters

General tab

  • Setup information for posting
    • Period Setup - Interest locked date: Specifies the date the system locks the interest calculation. No interest will be calculated or posted for a date prior to this date. Only System Administrators can update this value.
  • AP Posting -Post to AP by account: Specifies, if selected, to post transactions to accounts payable by the account number. Used with the AP-AR interface screen to sum transactions by account for posting.
  • Posting Options
    • Post ref nbr to GL as: Specifies what information to post to the General Ledger for the Reference Number and Description fields. Select the dropdown to determine how the loan description should post to the GL. Options include:
      • Loan no.
      • Reference number
    • Post desc to GL as:: Specifies what information to post to the General Ledger for the Description field. Select the dropdown to determine how the loan description should post to the GL. Options include:
      • Transaction type/loan
      • Transaction description

Other options tab

  • Setup information for other options

    • Daily Late Fee - Amount: Specifies the daily late fee amount. - Payment Code: Specifies the payment type code for posting the late fee or use the dropdown to select a payment type code.

    • Payment Options

      • Payment received date defaults to today: Specifies, if selected, to default the date in the loan payments screen to Today's date. If this is not selected, the payment will be the date the payment was due.

      • Allow change of payment received date: Specifies, if selected, that the payment received date can be changed.

  • Aging Categories

    • Aging 1: Specifies the number of days for the first aging period.

    • Aging 2: Specifies the number of days for the second aging period.

    • Aging 3: Specifies the number of days for the third aging period.

    • No. decimal for daily interest: Enter how many Decimal places are to be used for calculating Daily Interest. Nine is the recommended setting.

    • Days to suspend interest: Specifies how many days to suspend the interest.

    • Default grace days: Specifies the default number of grace days - days a payment can be late before a fee is charged.

    • Prevent payment applications to closed loans: Specifies, if selected, that a user will not be able to apply a payment to a loan that has a status of closed.

    • Show all int: Specifies, if selected, to show all interest in outstanding balance amount on the loan screen.

    • Calculate payment on loan amt: Specifies, if selected, that when the credit type for a loan is flat rate, interest will be calculated during the pending or processing status using the loan amount instead of the authorized amount to create the amortization schedule.

    • Grace process - recalc Int after hours: Specifies that when using the nightly interest process (see utilities or interest calculation section), this option should be selected to inactivate the recalculation of interest associated with grace payment processing.

    • Validate closing amounts: Specifies, if selected, to verify the principal amount when closing a loan. If the user enters a principal amount greater than the remaining principal balance, the system will not allow the loan to be closed.

    • Calculate interest on issue date: Specifies, if selected, the system to calculate interest on the interest start date. If not selected, the interest will start the next day.

    • Require posting approval on loan form: Specifies that the system will require a different user/Login ID approve the loan than the person who entered it in the system.

    • Process deferred revenue: Specifies, if selected, for the system to use the process of deferred revenue. This option is for receivable loans only. when you do an issue, it takes the sum of the interest in the payment schedule and posts it as DEFREVI payment type code. a payment is made, it posts a DEFREVPI payment type code for the amount of the interest relieving those accounts.

    • Display late payment warning: Specifies, if selected, for the system to display a late payment warning. The program enters the due date by loan number. If you are entering a payment after the due date, the system will warn "Are you sure the entered date is correct?"

    • Do not allow interest unless year end run: Specifies, if selected, that interest payments and accruals cannot be run in a new fiscal year until the last year of the prior year has been run.

    • Disable originator field: Specifies, if selected, that information for the originator on the loan origination tab cannot be changed.

    • Post by Ownership: Specifies if transactions for a loan are to be applied to more than one Owner. When selected, all loans will require Ownership information.

  • Journal Name: Specifies which journal name to use for Vendor invoices and General Journals.

    • Vendor Invoice Journal
    • General journal
    • Customer general journal

Posting information tab

  • Set up information for posting
    • Last batch number: The system automatically populates this field with the Last Batch Number used.
    • Last acct id: Used with Loan Application Software. The System automatically populates the information.
    • Last receipt #: The system automatically populates the information.
    • Last application nbr: Used with Loan Application Software. The system automatically populates the information.

Number sequences tab

  • Setup number sequences for loan management module
    • Reference: The reference keys for which number sequences can be selected. - Batch number - Loan number - LMS vendor invoice id - LMS free text reference number
    • Number sequence code: Unique ID for the reference in the database.
    • Description: Specifies free-text information about the specified number sequence.

Loan loss percentage

Defines the loss percentage for the loan between various periods.

  • Code: Specifies an identifying code for the Loan los percentage.
  • Description: Specifies a free-form text information about the Loan loss percentage.
  • Start Month: Specifies a numerical value indicating how many months past due should be used for the calculation.
  • End month: Specifies a numerical value indicating the end of the range of months past due for this calculation.
  • Loss %: Specifies the estimated percent for calculation of the dollar amount that is expected to be lost, for the loans that fall within this category.
  • Report header: Specifies a header for the report.
  • Created By: Specifies the User ID that created the record.
  • Created date and time: Specifies the date and time the record was created.
  • Modified by: Specifies the User ID that last modified the record.
  • Modified date and time: Specifies the date and time the record was last modified.

Loan type code

Used to define the type of code.

  • Loan Type
    • Type of Loan: Specifies the type of loan. Drop down options: payable or receivable.
    • Credit Type: Specifies the Credit Type. The selected credit type will be the default setting for the loan type but may be changed on the loan page. Drop down options: actual payment, add on – with payoff, add-on, custom, end of term, fixed principal repayment, flat rate, normal, normal no early payoff, or special add-on.
    • Currency: Specifies the currency for the loan type. Lookup will display currency codes.
  • Due Day: Specifies the day of the month the loan will be due. The default is 0 – EOM (zero for end of month). The number entered here will be the default for all loans of this type. The due day can be changed on an individual loan when it is entered into the system.
    • Currency Rate Type: Specifies the currency rate type for the loan type. Lookup will display currency rate type codes.
      • Calculate late interest on interest: Specifies if late interest should be calculated on the unpaid interest amount.
    • Calculate late interest on principal: Specifies if late interest is to be calculated on unpaid principal amount.
    • Created By: Specifies the User ID that created the record.
  • Created date and time: Specifies the date and time the record was created.
  • Modified by: Specifies the User ID that last modified the record.
  • Modified date and time: Specifies the date and time the record was last modified.

Loan status code

Specifies the stage or status of the loan. Options include:

  • Description: Specifies free-form information about the loan status code just entered. Field is not selectable.
  • Order: Specifies the Order in which the status codes will be used (i.e., 1, 2, etc.).
  • Status Code: Specifies the status for the loan type code. User can click on the status label to display the status code lookup screen and make a selection. Available options: active, closed, pending, process or void. Pending or processing must be used for a loan before it is changed to active.

Loan payment code

  • Payment code: Specifies the payment code for the loan type. Lookup will display all payment codes. The selected payment codes will be the default settings for the loan type but may be changed on the loan page. Payment codes may be setup on the accounting page for loans if the DR and CR accounts will be different than the loan type accounts.
  • Payment description: Specifies the description associated with the payment code selected.
  • Payment type: Specifies the payment type associated with the payment code selected.
  • DR account: Specifies the Debit Account. Lookup will display chart of accounts.
  • CR account: Specifies the Credit Account. Lookup will display chart of accounts.

Loan status codes

  • Status code: Specifies the code for this status. The system has pre-populated status codes. Additional codes may be added by entering a new code.
  • Loan status Specifies the status of a loan.
  • Description: Specifies free-form text information about the status code.
  • Created By: Specifies the User ID that created the record.
  • Created date and time: Specifies the date and time the record was created.
  • Modified by: Specifies the User ID that last modified the record.
  • Modified date and time: Specifies the date and time the record was last modified.

Owner codes

Specifies the Owner Code and Description. The Payment code, Payment type, Credit and Debit accounts and Payment description must also be setup.

The Owner represents the person or company supplying the funds for the loan. For example, a loan can be shared among two or more parties. In such cases, we define the Ownership Codes which specifies who owns how much on the loan. Based on that information, the payments for interest and other fees and charges are allocated to the Owners.

  • Payment code: Specifies the payment code used for a transaction when ownership posting is set up.
  • Payment type: Specifies the payment type which determines how the payment acts in the system.
  • CR account: Specifies the account to be credited when the payment code is used for this owner.
  • DR account: Specifies the account to be debited when the payment code is used for this owner.
  • Payment description: Specifies the description of the payment code to be used in transactions.

Payment code

Specifies the action to be taken by the system in various transaction processes. The grid includes the Payment Code and Description, the Payment Type and the Debit and Credit accounts.

The Loan Management System is installed with the Payment Codes necessary for all types of transactions. The system allows the user to setup specific debit and credit accounts from the GL to be used with the Payment Codes.

The program has a hierarchy for determining the GL accounts to be used. Default accounts setup for loans will be used as designated for each payment code. The order is as follows:

  1. Check for an Owner Code on the Loans Ownership screen. Use accounts for that Owner.
  2. Check the individual loan for accounts set up on the Accounting Information screen.
  3. Check the Loan Type, payment code grid.
  4. Check Payment Codes as setup in Maintenance\Payment Codes screen.

If at least one of these areas is not setup, the transactions (Issue, Payments, etc.) will not have GL account information and cannot be posted.

  • Payment code: Specifies the payment type code for posting the late fee or use look up to select.
  • Description: Specifies the description associated with the payment code selected.
  • Payment code status: Specifies the status for the payment code.
  • Payment type: Specifies the payment type of the payment code. Select option from dropdown.
  • Write-off Role: Specifies the security role for the payment code. A user must be a member of the role id selected in order to perform write-off transactions using a write-off payment type code. Use the lookup to view security role ids, select.
  • Allow delete: Specifies if the code may be deleted. This option is not active for Payment Codes installed with the program. Enable this code when creating a new code if you want to allow the payment code to be deleted.
  • Account
    • DR account: Specifies the Debit Account. Lookup will display chart of accounts.
    • CR account: Specifies the Credit Account. Lookup will display chart of accounts.
  • Date and Time
    • Created By: Specifies the User ID that created the record.
    • Created date and time: Specifies the date and time the record was created.
    • Modified by: Specifies the User ID that last modified the record.
    • Modified date and time: Specifies the date and time the record was last modified.

Payment order (Payment application setup)

The Payment Order determines how Auto Apply on the Loan Payments screen will distribute a payment. When Auto Apply is chosen from the Payments screen. The system looks at the Auto Payment Application field (selection) that has been chosen for the specific loan on the Loan Origination screen. The setup can be applied to all loans, loans of one type, or individual loans.

The program has a System Setup order pre-populated. If System Setup is selected during the entry of the loan setup, the default order of the payment application will be used as shown. Any changes made to the System Setup will become the default when System Setup is selected on the origination screen for a loan.

  • Loan number: Specifies the loan number to assign an auto application payment order or use look up to select. The payment application setup will only apply to the loan number chosen. If there is no loan number the payment application will be used for all loans. Lookup can be used to select the loan number from the loan list.

  • Type code: Specifies the loan type code to assign an auto application payment order or use look up to select. The payment application setup will apply to all loans that are the type chosen. If there is no loan type the payment application will be used for all loans. Lookup can be used to select the loan type from the loan type list.

  • Order number: Specifies the number for each payment type to be used for the auto payment application. This determines in what order the payment will be distributed to the selected payment type. By leaving a gap in the order numbers, you will be able to add payment types without renumbering all the payment types.

  • Payment app code: Specifies the description for the order no. Drop down can be used to select the code from the payment app code list.

  • Payment code: Specifies the payment type code for posting the late fee or use look up to select.

  • Created By: Specifies the User ID that created the record.

  • Created date and time: Specifies the date and time the record was created.

  • Modified by: Specifies the User ID that last modified the record.

  • Modified date and time: Specifies the date and time the record was last modified.

Region Code

Specifies user defined codes and descriptions to assign to the loans. For example, states, countries, or areas.

  • Code: Specifies a Region Code or use look up to select. Use the field for information to be included in the loans (i.e., territory, branch, state, department, location).
  • Description: Specifies free-form text information about the region code.
  • Created By: Specifies the User ID that created the record.
  • Created date and time: Specifies the date and time the record was created.
  • Modified by: Specifies the User ID that last modified the record.
  • Modified date and time: Specifies the date and time the record was last modified.

Sector Code Card

Specifies user-defined codes representing sectors which can be defined, for example, as areas or zones.

  • Code: Specifies a Sector Code or use look up to select. Use the field for information to be included in the loans (i.e., territory, branch, state, department, location).
  • Description: Specifies free-form text information about a sector code.
  • Created By: Specifies the User ID that created the record.
  • Created date and time: Specifies the date and time the record was created.
  • Modified by: Specifies the User ID that last modified the record.
  • Modified date and time: Specifies the date and time the record was last modified.

Screen rate indexes

The screen rate codes are setup and the process is also performed under Index Rate process. Here you can provide information on why interest was added to the loan. The Screen Rate Index is used to change the interest rate for the loan, by stating the code or reason for the change in interest rate. We create a screen rate code with that name and specify the rate and process. It is available on the Loan interest tab.

Index codes give you the option to adjust interest on a loan based on the market interest changing. For example, the interest on Loan XYZ is based on the 3 month Treasury Rate for CD's. If that interest rate is 1%, you can tie the loan to that rate for the base interest and then add a spread and/or floor. After creating the index, it's applied to the interest screen, accessed from the Loan screen.

  • Index code: Specifies the name of the index code.
  • General
    • Index code: Specifies the name of the index code.
    • Description: Specifies free-form text information about an index code.