Creating a line of credit program
Design and configure a custom program for revolving, transaction level credit.
When you create a line of credit account, your very first choice is to select a program. Programs are templates for line of credit accounts, and help streamline the process for creating individual accounts. They also set some servicing defaults, so they'll have a lasting impact on line of credit accounts.
Still, you can customize any individual account, so the choice of program isn't totally binding. Configuring programs to match your lending model will help you save time in your day-to-day operations. This article will explain what all they affect as well as how to create and manage them.
Creating and editing programs
Programs include four key parts: Account Setup, Account Settings, Available Credit, and Defaults.
Account Setup
Account Setup includes buckets, minimum payments, and late fees. For more details on individual fields, see our article Line of Credit Setup.
Note that when you set dates for programs, you'll choose an offset number rather than a date. This is the number of days from account creation. For example, if you enter 20 in the field 'First Payment Date Offset' when creating a program, and then create an account with that program on October 5, then that account's First Payment Date will be October 25.
Account Settings
Here, you can configure the default settings for each line of credit account created with a program. For more information on specific fields, see Line of Credit Settings.
Defaults
Defaults determine which options are pre-selected when you log charges, payments, or AutoPays. It might seem like a small change, but having the defaults preconfigured to closely match your most common servicing tasks will save a lot of time in the long run.
Charge defaults
Charge defaults set the initial settings any time you log a charge.
Charge defaults set the initial settings any time you log a charge.
| Field | Description |
| Charge Type |
A label for categorizing charges. |
| Interesting Bearing | Whether the charge will accrue interest. |
| Included in Past Due Calculations | Whether the charge will be included in past due calculations. |
Payment defaults
You can also set defaults for payments made on accounts modeled after the program.
| Field | Description |
| Payment Type | A label for different kinds of payment. |
| Payment Profile | Which payment profile should be used for the payment. Rather than a specific profile, the options include the primary or secondary profiles for both primary and secondary customers. |
| Payment Method | The payment method options include Bank Account, Bank Card, and Cash. |
| Convenience Fee | This box toggles whether a convenience fee will be added. |
| Authorization Type | How the payment will be authorized. |
Autopay defaults
You can also set defaults for AutoPays.
| Term | Field |
| AutoPay Type | Whether it’s a single, multiple, recurring AutoPay. |
| Service Fee | Whether a service fee should be applied and what that fee should be. |
| If AutoPay amount exceeds or is equal to Total Balance | What to do if the amount of an AutoPay is larger than the balance on the account. |
| AutoPay Time | When the AutoPay will process. |
| Type of Payment | The type of payment. |
| Post Payment Update Apply Date |
If a payment originally fails, but succeeds on a subsequent retry, this box toggles whether the apply date should be updated to the day the payment actually succeeds or if it keeps the original date.
|
| Schedule Next if AutoPay Fails | If an AutoPay fails, this box toggles whether the system will schedule another. |
| Process on Calendar Day or Banking Days only | Whether AutoPays will only be scheduled on days when banks are open. |
| Payment Process/Application Date Difference | The number of days between when a payment is processed and when it is applied on the account. |
| Retry AutoPay | Whether or not to automatically retry when an AutoPay fails. |
| Process if Current | Whether or not to process AutoPays on accounts that are current. |
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Reschedule Recurring Payments Based On |
How and when future AutoPays will be scheduled. |
| Primary Payment Profile | Which payment profile the AutoPay will use. |
Line of credit setup
Setup is first configured in programs, the templates used to create line of credit accounts. When you create a new account, you'll select a program, and the system will create an account with the setup from that program. From there, you can customize an individual account.
Within a line of credit account, click on the Account Settings tab and click ‘Setup’. This page holds information about basic setup, buckets, late fee, minimum payments, and additional info. Clicking the pencil icon to the right of each section will let you edit the items in that section.
Account Setup
Just like on an installment loan, a line of credit account's most basic information is configured on the Account Setup page.
The first section is Account Setup, which covers the most basic information about the account. Here's a breakdown of each field:
| Field | Description |
| Activate Account | This toggle switch activates the calculator. Once it's switched on, the account will begin accruing interest. |
| Open Date | The date you opened the account. |
| First Statement Date | The date on which the browser receives their first statement. |
| Statement Frequency | How often statements come due. |
| First Due Date | The date the first payment is due. |
| Total Credit Limit | The upper limit on how much the borrower can spend. Creating swipes reduces your total available credit limit, while making payments adds money back to your available credit limit. |
Buckets
Next, you'll select which buckets you'd like to include on the account. You'll be able to select from the bucket labels you've created in Settings > Line of Credit > Labeling > Buckets. For each bucket, you'll also be able to configure its settings.
Clicking the black plus + icon in the top right will let you add a new bucket. This will also allow you to create the settings for the bucket.
The easiest way to get buckets in your line of credit accounts is to set them up in your programs, and then use those programs as the templates when creating new accounts. However, you can also add a bucket to an individual account.
Configure buckets in programs
To configure buckets within a program, navigate to Settings > Program. Either click ‘Add’ to create a new program, or click the pencil icon next to an existing program to edit it.
Scroll down to the 'Buckets' section. Here, you can determine which existing buckets will apply to the account by clicking the checkbox next to the bucket's name. You can also edit each bucket's settings.
Configure buckets in individual accounts
You can also edit the buckets on specific accounts once they've been created. Like we explained above, you'll need to have added any buckets you want to use at the tenant-level first, but once you've added those labels, you can open any line of credit account and navigate to Account Settings > Setup.
Buckets are near the top, just below the Account Setup section. Next to each bucket is an arrow that you can click to expand more details. When you do, you'll also see a blue 'Edit' button with a pencil icon. And on the far right, there's a blue plus + button that lets you add a new bucket.
When you add a new bucket or edit an existing one, it'll pull a window with all that bucket's settings.
When you're done editing, click ‘Save’. The settings are the same as what you'd find when editing buckets at the program level, and they're explained in detail below.
Bucket settings
Whether you edit them in a program or an individual account, the settings for buckets are the same. Here's a breakdown of each available option:
| Field | Description |
| Bucket | This is the name of the bucket. It's drawn from the list of names in Settings > Line of Credit > Labeling > Buckets. |
| Make Primary | This setting specifies which bucket is the primary bucket. The primary bucket sets the credit limit for the entire account. |
| Original Credit Limit | This is the credit limit for this bucket. If this bucket is set as primary, the value you set here will be the account's entire credit limit. The credit limit for any individual bucket must be less than the amount specified for the primary bucket. |
| Insert Charge Method |
This is the method used to determine the finance charge on the line of credit. Though we plan to add more options in the future, there is currently only one:
|
| Computation Method |
This is applicable when the Interest Charge Method of Interest is chosen for the bucket. The options for interest computation are as follows:
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| New Transactions |
This determines when interest will accrue on new transactions. The options are as follows:
|
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Original Interest Rate |
This is only applicable if Interest is selected as the Interest Charge Method. The interest rate used to calculate interest on the balance in the bucket |
| Days in Year | Just like the Days in Year on an installment loan, this lets you either calculate the actual number of days or a number based on the account's billing cycle. (The interest rate remains the same with either option; this just determines whether it's divided out into 365 portions, or a different number that divides evenly across your billing cycles.) |
| Minimum Interest | If this account would accrue interest in a billing cycle, it will accrue at least this amount. If your minimum is set to $1 and the account would accrue only $0.85, it will accrue a whole dollar instead. |
| Compound Past Interest Charges? | If this box is checked, then the interest accrued in previous billing cycles will begin accruing interest itself. |
| Interest Abatement Method |
This setting will determine how interest abatement will work for the bucket.
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| Interest Abatement Days | The number of days that the abatement period lasts. |
Late fees
Late fees have you choose between a fixed amount, a percent of the minimum payment, or the greater or lesser of the two.
Below, there are two checkboxes:
- CARD Act Friendly? - If this box is checked, two changes will happen to keep these fees compliant with the CARD Act. First, in the first year the account is open, no more than 25% of the total credit limit will be charged in fees. If an account would exceed that number, it will be capped at 25% instead. Second, a borrower's second fee in a six month window will be capped at $30. (If there hasn't been a fee on the account in more than six months, this cap won't apply.)
- Late Fees are Interest Bearing? - This determines whether the late fees will accrue interest.
Minimum Payments
Minimum Payment Setup determines the smallest amount the borrower will have to pay at the end of each billing cycle.
Here's a breakdown of each option:
| Setting | Description |
| Type |
The first section determines how the minimum payment will be calculated. These three options interact with the two fields below for a dollar amount and a percentage.
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| Amount & Percentage | These fields interact with the Type settings above to determine how the minimum payment is calculated. |
| Round Payment |
Checking this box lets you round minimum payments to a whole number. You have three options (up, down, and regular) and an amount interval.
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| Percentage of Statement Balance Includes |
Checking the boxes for these components determines if they're used in the calculation for the percentage figure above.
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| Amounts Added to Minimum Payment |
Checking the boxes for these components determines whether they're used in the calculation for minimum payments.
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| Add these amounts to |
There are two options:
They determine whether the components above will be added to those initial figures—the dollar amount and the percentage of the statement balance. This lets you come up with nuanced minimum payment logic. For example:
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Additional info
This section displays your setup custom fields. These fields are shared between installment loans and lines of credit.
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