In LoanPro, discounts (sometimes called lender's fees) can be a powerful tool for managing loan terms and ensuring accurate payment allocation. Discounts are typically the difference between the amount paid for a loan note and the face value of the note. They represent a revenue opportunity for lenders but must be tracked carefully to maintain accuracy in loan servicing.

This guide focuses on how to configure discounts within LoanPro's platform, preview their impact on loan payments, and analyze their breakdown in reports. For a detailed explanation of the different discount calculation methods and examples, refer to our article calculating discounts.

Applying a discount to a loan

Discount settings can be configured during loan creation or edited later. Follow these steps to apply a discount to a loan:

1. Navigate to the loan account.
2. Go to Account Setup > Setup Terms > Loan Terms. 
3. If the loan is already active, you'll need to inactivate it temporarily to make changes. 
4. Under the loan terms, locate the ‘Discount’ amount field: Enter a specific discount amount (e.g., $1,000). If you prefer, click the ‘Show %’ button to set the discount as a percentage of the total loan amount.
5. Once you've entered the discount amount, select the calculation type under the ‘Advanced Configuration’ tab. LoanPro supports five calculation types: Full, Percentage, Percentage Fixed, Rebalancing, Straight Line. For a detailed explanation of these methods, see our calculating discounts article.
6. Click ‘Save & Calculate’ to finalize your settings. Scroll down to the 'Schedule Tools' button and select 'Configurable Payment Schedule' to preview how your discount is applied to the payments of the loan. 

View the discount breakdown

You can view the discount breakdown of an activated loan on the loan transactions tab. Navigate to a loan account and select Reports > Transactions. Here, you can view how the discount has been applied to the payments on the loan. In addition, the side panel on the right displays a breakdown of each portion of the loan. 

Discounts in reports

You can also view discount at the tenant level. If you would like to see a breakdown of how discount has been applied to all loans within your account, navigate to Reports > Transactions History > Payment Breakdown.

The Payment Breakdown section (highlighted in the top left corner) of the ‘Reports’ tab provides a breakdown of payments that have been made on loan accounts within your company over a date range. You can view how discount has been applied to payments you have received.

The  'Log Date Period' filter on the left allows you to view payments in a specific date range. Under the 'Payment Application' section, you can see how the payments are broken down into principal, interest, fees, discount, and others. Next to the payment application is a pie chart that visualizes how these categories make up the whole. At the bottom is a list view of each payment received. When you use the ‘Payment Breakdown’ report, you may notice that your account shows different columns than our example. To display or hide columns, click the highlighted button with the three stacked columns on the left side of the list view.