Setting up a loan
Understanding and configuring loan setup terms in LoanPro.
When setting up a loan or lease, the Account Setup area contains the inputs and functions that let you define what the loan or lease is, including things like term length, payment schedule, interest rate, etc. There are three areas where the loan or lease data can be entered or updated: Setup Terms, Setup Tools, and Processes. This article will go over how the setup terms work and explain the information that each section contains.
Configure setup terms
The ‘Setup Terms’ page contains the terms and settings that determine how the loan will accrue interest, calculate escrow, and define what the loan is in general. You will automatically be taken to the loan terms after your initial saving of the loan. If the loan has already been created, you can view and edit information about the loan by navigating to Account Setup > Setup Terms within the loan.
Setup Terms has both an edit view and an activated view.
The activated view is only available for loans that have been activated. The display will show a summary of the numbers for the loan including APR, finance charge, the amount financed, the total of payments, and the total sales price. This view also includes a simple version of the payment schedule that is viewable by clicking ‘Payments’ underneath the loan summary numbers. The schedule can be filtered using the TIL Forecasted Payments and TIL Scheduled Payments. 'TIL' refers to the numbers originally calculated for the loan. For a more detailed schedule of payments, you may want to look at the Transactions Report. The bottom section of the activated view will show you specific numbers and settings for the loan setup.
By clicking edit, you can enter data into each of the following tabs: loan terms, escrow calculator, additional information, advanced configuration, and late fee configuration.
Loan terms
The first tab is loan terms, which shows the main terms used to create the loan.
The terms in this section include the following:
| Term | Description |
| Total amount | Original loan amount. This does not include the Underwriting Fee. |
| Discount | Any part of the Total Amount that wasn’t included in the funding check that will become revenue to the lender. |
| Interest rate | Interest rate for the loan. This will include the interest rate frequency. |
| Underwriting/refinance fee | Any origination, underwriting, or refinance fees applied to the loan. |
| Interest rate method | Either Fixed or Variable. |
| Margin | If you're using variable interest, this number is added to the index rate. |
| Min | If you're using variable interest, this is the rate's lower limit. |
| Max | If you're using variable interest, this is the rate's upper limit. |
| Contract date | Date the loan will start. |
| Payment frequency | Frequency with which payments come due. |
| First payment date | Date that the first payment will come due on the loan. To the right of this field, you will see a + icon. Click this icon to add additional curtailment (payment) dates to your loan schedule. |
| Term | Number of payment periods in the loan. |
Escrow calculator
The escrow calculator section displays the information that was entered into the escrow calculator in order to calculate escrow adjustments.
The following information is available for each escrow bucket:
| Escrow Bucket | Description |
| Percentage base | Calculate total escrow as a percentage of one of the other loan numbers. The percentage base tells you which number you chose. |
| Percentage | Percentage of the percentage base number that will equal the total escrow amount. |
| Total | Total amount of escrow that will be paid over the life of the loan. Learn more from escrow management. |
| Pro-rate 1st period | Increase or decrease the amount of the escrow adjustment in a payment period based on the number of days of the first period payment. |
| Escrow extend final | If the loan term is extended for any reason, you can choose whether escrow will still come due on payments that come due after the originally calculated loan term. |
| Term | Original scheduled number of loan periods during which escrow will come due. |
| Regular period | Amount that will come due in escrow during a regular payment period. |
| First period | Amount of escrow that will come due in the first payment period. If you have chosen to prorate the first-period escrow amount, it may be different from the regular period escrow. |
Additional information
The additional information section, also available under setup tools, contains different information depending on the type of loan you're looking at (i.e. automobile, real estate, consumer, other). While it applies to all loans, most of its options apply to automotive loans. It can potentially contain any of the following:
| Term | Description |
| Net down amount | Down payment made on the purchase of the loan collateral. |
| Sales price | Sales price of the collateral. |
| Taxes | Taxes paid on the purchase of the collateral. |
| GAP insurance tracking | Amount paid for any Guaranteed Asset Protection (GAP) insurance on the loan collateral. |
| Warranty | Amount paid for a warranty on the loan collateral. |
| Dealer profit | Amount the dealership made (gross profit) on the sale of the loan collateral. |
| Reserve amount | Amount held in reserve (part of the loan held back from the dealership) to insure against bad loans from a dealership. |
This section also contains loan custom fields if you have set them up in your account.
Advanced configuration
The advanced configuration section shows some important settings for loans. These settings control things like interest accrual, accounting for discount, payment period length, and much more.
The available information for this tab includes:
| Term | Description |
| Loan Type | Type of the loan (i.e. installment, credit limit, flooring, lease) |
| Loan Category | Category of the loan (i.e. automobile, real estate, consumer, other). |
| Calculation Type | Interest calculation type of the loan (i.e. simple interest, interest-only, rule of 78, simple interest locked). |
| Accounting-discount split | Whether discount income will be recognized over the life of the loan. |
| First period days | Number of days on which interest should accrue in the first payment period of the loan. |
| Days in year | Number of days in the year to use in interest calculations. |
| Beg/end | Whether interest should be calculated based on payments coming due at the beginning of the payment period or the end. |
| Interest application | Way interest should be calculated for early or late payments and how payments should apply to interest. |
| Round | Number of decimal places that numbers should be rounded to during loan calculations. |
| Last as final | If the calculated final payment date for a loan should be the actual final date of the loan. |
| First day interest | Whether interest should be accrued on the first day of the loan. |
| Schedule round | Dollar amount that will be rounded off the end of the payment schedule. |
| Curtailment date template | Template that will define the dates of your flooring loan curtailments. |
| Suspend/resume interest | Whether interest should cease to accrue after the originally calculated final payment date of the loan. |
| Fees paid by | Choose whether payments should apply only to fees that were assessed on or before the payment date, or whether they should apply to any fees assessed in the same payment period even if they are in the future. |
| Roll schedule template | Template that will help define the schedule of payments. |
| Due on business days | If payments come due on non-business days, you can choose to have the system adjust them to come due either on the most recent previous business day or the next business day. |
| Payment date app | Apply payments to the loan based on the actual date the payment is made, or on the furthest-in-the-past, missed payment date. |
| NDD (next due date) calculation | Only available when Interest Application is set to Between transactions. Choose whether the amount past due should be calculated as the amount that has come due minus the amount paid, or the amount of interest that has come due minus the amount of interest paid. |
| Max interest amount | Determine the maximum interest you'd like to set on a loan. |
| Set as finance charge | Choose if you want to cap the interest at the finance charge as it's calculated on the screen. |
These selections are generally the same across loans in the tenant. All of these options can be set as default in the Settings > Defaults > New Loan > Loan Type Specific area of LoanPro. Settings can also be saved as a preconfigured loan to easily create loans with the correct settings.
Late fee configuration
This section shows the selections made for automatic late fees on the loan.
The information available for this tab includes:
| Term | Description |
| Late fee type | Specify when the late fee is assessed. |
| Grace period (days) | Number of days after a payment comes due before a late fee comes due. |
| Late fee | Amount of the late fee. |
| Late fee percentage base | Number that the late fee percentage is based on. |
| Buckets added to late fee percentage base | If the late fee percentage base is the regular payment amount, you can specify if escrow adjustments should be included in that amount. |
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