Loan System Settings

Setting up your Default Loan Settings (IL01LN)

Loan System Settings are a group of setup selections applicable throughout the Loans system. They pertain to loan fees, minimum/maximum dollar amounts, default general-ledger accounts and general journals, among other areas. It is important to remember that any changes made to the fields in this area could have wide reaching effects on your loan system functionality, so we strongly recommend contacting DDI Client Support for assistance before making any changes that you are unsure of.

To access the loan system settings screen:

• Double-click Financial Services
• Double-click Loan
• Double-click Setup
• Double-click Loan System Settings. You will see this screen:

As you can see, there are four tabs in this area of the system.

Settings Tab

These are the fields and controls established on the Settings tab:

Field	Description
Application Fee Method	Your organization may elect to assess borrowers a fee for each new loan application. This is intended to recoup some of the costs of setting up loans that are never activated. The fee may be a flat amount or a percentage of the loan commitment
Closing Fee Method	Your organization may elect to assess borrowers a fee for loan closings. This fee may be a flat amount, a percentage of the advance amount, or a percentage of the loan commitment.
LSP Margin	Percentage used to help determine the interest rate for a loan under the Loan Support Program (LSP). The following formula is used to calculate the interest rate for a supported loan: (1 - % supported)(base rate) + (% supported)(weighted average supported rate + LSP margin). Note: The Loan Support Program does not apply to all loans
LSP Frequency	Frequency with which a regular scheduled job runs (during Job Processing) to recalculate the interest rate for an LSP loan. If the three-month option is selected, for example, there will only be potential for the rate on LSP loans to be adjusted each quarter.
Balance where loan is automatically paid off	Once loan interest balance reaches this dollar amount (or less), it is considered to be paid off. This is the maximum dollar amount automatically written off. Must be less than $1,000; typically should be less than $100. The written-off amount affects the general-ledger account identified for Interest Income in Loan System Settings (IL01LN). Note: If the remaining balance is in principal it does not qualify for automatic refund processing.
Minimum overpayment to be refunded at payoff	The smallest loan overpayment that will trigger a refund payment at loan payoff. Loan refund checks cannot be issued for smaller amounts. Smaller overpayments are realized as income. Must be less than $1,000.
Maximum allowed prepayment amount	Maximum allowable payment amount in excess of the current payment. Must be less than $1,000
Maximum number of allowed prepayments	Amount of regular payments that will be accepted in excess of the regular loan payment. For example, if the regular payment is $800 and the maximum number allowed is three, the maximum amount allowed would be $2,400
Grace period between first/final advance and accrual	Period in days between when an advance payment is issued (by check, wire, etc.) and interest begins to accrue
Default due day	Day of the month that loan payments are due by default
Use adjustment logic	Controls whether the following loan fields are enabled: adjustment date, adjustment frequency, adjustment method, maximum adjustment per incident, lifetime maximum adjustment. The loan adjustment process updates loans and their interest rates on a periodic basis.
Late Fee Method	Selection indicating how/whether late fees are assessed on loans

When you select the late fee method, you have a drop down that offers 4 choices:

• Flat Fee: If selected, the field "Late fee amount" will display. Enter the set fee dollar amount
• Not Setup: This means that your organization does not charge a fee for late payments
• Percent of Balance: If selected, the field "Late fee pct" appears. The percentage entered here will calculate the late fee based on the remaining balance of the loan.
• Percent of Regular Payment: If selected, the field "Late fee pct" appears. The percentage entered here will calculate the late fee based on the regular payment amount.

General Ledger Tab

The General Ledger tab establishes the GL accounts that should be used for each of the items listed on the tab. For each of the fields, you can either key in the applicable GL account or click the list icon to the right of the field to select the GL account from the list.

Field	Description
Asset	General-ledger account affected by changes to loan balance
Advances	General-ledger account affected by loan advances
Payments	General-ledger account affected by loan payment receipts
Reserve/Escrow Payable	General-ledger account affected by reserve/escrow payables
Reserve/Escrow Expense	General-ledger account affected by reserve/escrow expenses
Application Fee Receivable	General-ledger account affected by application-fee receivables
Loans in Process	General-ledger account representing the amount of the loan commitment not yet advanced to the loan borrower. Typically a liability account.
Closing Fee Income	General-ledger account affected by realization of closing-fee income
Application Fee Income	General-ledger account affected by application-fee receipts
Miscellaneous Adjustments	General-ledger account affected by loan miscellaneous adjustments
Disbursement Payable	General-ledger account affected by disbursements of loan payment (advances, rebates, refunds)
Interest Receivable	General-ledger account affected by interest receivables
Interest Income	General-ledger account affected by realization of loan-interest income
Interest Collected	General-ledger account affected when loan payments are received. The amount matches the accrued interest reduction on associated loan payment transactions
Rebate Expense	General-ledger account affected by loan rebate expenses
Rebate Payable	General-ledger account affected by loan rebate payables

General Ledger 2 Tab

As with the General Ledger tab, the General Ledger 2 tab establishes the GL accounts that should be used for each of the items listed on the tab. For each of the fields, you can either key in the applicable GL account or click the list icon to the right of the field to select the GL account from the list.

Field	Description
Late Fee Income	General-ledger account affected by late-fee receipts. For increases in late fees, the Late Fee Income account is credited. For decreases in late fees, the Late Fee Income account is debited
Late Fee Receivable	General-ledger account affected by late-fee receivables. For increases in late fees, the Late Fee Receivable account is debited. For decreases in late fees, the Late Fee Receivable account is credited
Miscellaneous Fee Income	General-ledger account affected by miscellaneous fee receipts. For increases in misc fees, the Miscellaneous Fee Income account is credited. For decreases in misc fees, the Miscellaneous Income account is debited
Miscellaneous Fee Receivable	General-ledger account affected by miscellaneous fee receivables. For increases in misc fees, the Miscellaneous Fee Receivable account is debited. For decreases in misc fees, the Miscellaneous Fee Receivable account is credited

Journal tab

Within DDI-Connect, every transaction generates a journal transaction code. In order to allow you to differentiate between daily and monthly transactions, you have the option of setting up a daily journal transaction code and a monthly journal transaction code.

Field	Description
Daily Journal	Journal value used to distinguish daily transactions from monthly transactions. Ensures that daily and monthly transactions are not intermingled.
Monthly Journal	Journal value used to distinguish daily transactions from monthly transactions. Ensures that daily and monthly transactions are not intermingled.

When you have finished editing the fields for loan system setup, click the Save icon on the toolbar to retain changes.