How Does the Loan Prepaid/Pastdue Field Get Updated?
I am looking at a loan's summary screen, and I am wondering how the prepaid/pastdue field gets updated?
A loan payment due processing report (il665) should be set up to run on a regular basis (either daily, monthly, or some other periodic schedule based on your organiation's needs)and creates what are called “due” records. This is the expected loan payment on each loan for the upcoming period. This “due” record causes the prepaid/pastdue figure on the loan to increase.
As loan payments are received and processed as “regular” payments (tranid 200) a record called “paid” is created. This “paid” record causes the prepaid/pastdue figure on the loan record to decrease. Therefore prepaid/pastdue is a reflection of the amount of loan payments “due” versus the amount of loan payments “paid”. You are also given the ability to perform an adjustment on this prepaid/pastdue field and the system will create a different type of “due” or “paid” record based on whether the prepaid/pastdue is increased or decreased.
If you go to “Loan Payment History” from the Loan Inquiry screen you will see these “due” records (Payments Required) and “paid” records (Payments Received):
You can have situations where a loan is showing prepaid when you may not feel that it is, such as a payment that is received 10 days before the due date. You can leave this field as is, and when the il665 report processes on the loan's due date, the prepaid/pastdue field will be updated.
Let's look at an example. We’ll be using loan #10314 in DDI’s DEMO system. Right now, the system thinks the loan is prepaid $15,111.50, and that it has a next payment due date of 05/01/2013:
If you click View and select Loan Payment History, the Payments Due doesn’t quite match what the system is stating on the Summary tab. This is because, according to the system, a payment is not technically “due” yet, since IL665 has not yet been run with dates that match the payment due date:
If we run IL665 with dates that match what the system thinks is the next payment due date:
The system will add a payments due line for the next payment due date. HOWEVER, it will show 09/01 as the payment due:
This is updated this way because the loan is set up to reflect regular monthly payments. So, if the borrower sends in a payment for 09/01, the next payment due date will jump to 06/01/2013. The Payments due screen will NOT update until IL665 is run. When that happens, it will add 10/01/2011 to the screen. This ensures that the regular monthly “payments due” records are reflected on the loan’s transaction screens. You will see that the status is automatically adjusted to “acknowledged” because this loan is prepaid.
Now, if we adjust the loan’s prepaid/past due and change the next payment due date:
Then go back to the loan in Financial Inquiry, you will see two things. One, the Payment Due date on the Summary tab is updated:
HOWEVER, if you click View and select Loan Payment History, the “Payments Due” screen has NOT updated, because IL665 hasn’t been run:
You now have the ability to update the due records within the loan payment history record. If you click on the desired menu item "Add", "Edit", "Delete". You have the option to select the appropriate payment type of payment and select the amount you would like to collect.
Once the IL665 report runs for a date on or after the most recent payment due date, the payments due screen will be updated to reflect the corrected due date:
The second portion of the Loan Payment History is the Payments received. If you click that button, you’ll see a screen similar to this one:
The status column shows the status of the payments that have been receipted into the system. Note that the financial adjustment shows on this screen. It will always show as “Outstanding”, because it wasn’t applied to a Payment Due record.
If you click an Acknowledged line, you will see how the payment was allocated:
In this example, because the loan was prepaid, the 08/01/2011 “payment due” was “paid” with the 04/05/2010 and 03/02/2010 payments received.
- Acknowledged payments have been applied to a “Payment due” item
- Outstanding payments have not yet been applied to a payment due
If you need to adjust the prepaid or pastdue amount on a loan, you can do so using the Loan Financial Adjustment screen. For information on how to perform a financial adjustment, please reference this page: Financial Adjustment for a Loan
