When you set up recurring charges, you have the option of using a fixed dollar amount, a percentage of a loan amount, or an amount determined by scaling fee brackets (formerly ‘contingency brackets’). Scaling fees let you configure a dynamic assignment of recurring fees based on a range of loan values like current principal balance. This article will go over the types of scaling fee brackets and how to create and use a new bracket.

Using scaling fees

Setting up a recurring charge with scaling fees includes two steps:

1. Configure a complete set of scaling fee brackets. Rather than just creating a single bracket, you'll want a set that fits together, so that every interval is covered.
2. Set up a recurring charge with a set of brackets selected as the amount calculation.

Scaling fee brackets can be set up for four different loan numbers:

Configure scaling fee brackets

In LMS, navigate to Settings > Loan > Charges > Contingency Brackets. Here, you'll see the brackets you've set up, sorted categorically. Within each category, they'll be organized in ascending order, letting you easily see how fees vary at each interval. Later, when you add your scaling fee bracket to a recurring charge, you'll select the type of bracket — not a specific interval — so think of each interval as a part of a larger, whole set of scaling fee brackets.

Clicking "Add" or the edit icon beside an individual bracket allows you to specify the following for the bracket:

• Start: Lowest dollar amount that will still qualify for this bracket.
• Stop: Highest dollar amount that will still qualify for this bracket. Entering a plus + will include anything greater than the start value.
• Type: Type of the bracket: Current Principal Balance, Original Principal Base, Next Due Amount, or Payment Amount.
• Fee amount: Amount of the fee that will be assessed on loans that fall into this bracket.

Click ‘Save’, then repeat these steps for however many intervals you want to set up. At your highest interval, you'll want to set the ‘Stop’ value as ‘+’, allowing that interval to catch any number from that point up.

Set a recurring fee with scaling fee brackets

Now that you have created a bracket, we can set it up for a recurring fee. Navigate to Settings > Loan > Charges >  Recurring Charges. Our article Recurring Fees explains most of this process, so this article will just focus on the scaling fee brackets.

When you add or edit a recurring fee, one of the options is amount calculation. Select ‘Contingency’, and then to the right you'll be able to select the scaling fee bracket you'd like to use.

For example, if you choose ‘Payment Amount’, and an account qualifies for this type of recurring charge, the system will check the payment amount on that loan to see which bracket it falls into. The amount of the fee will then be the amount specified in that bracket.