The penalty section is available under each loan component:
This functionality allows lenders to define the rules for penalty calculation for each loan component separately if the borrower is late with their scheduled repayments.
When a penalty is enabled, the pricing rule configuration elements will appear in the pricing section next to the component pricing rules. When you select a more sophisticated set of pricing rules, the detailed set of parameters opens below the list of components in the particular tab.
Base
List
Select the value used to calculate the penalty. The possible values are:
Debt - only debt amount is used for calculating the penalty amount. Note: this should be the value that is usually selected.
Debt and Balance - both debt and outstanding balance are used for calculating the penalty amount.
Penalty type
List
Select the penalty calculation type. The possible values are:
Fixed,
Floating,
Same as interest,
Floating penalty with interest.
Reference rate
List
Select the reference rate that is used. Note: this field is applicable only if the Interest type = Floating or Floating penalty with interest.
Negative rate handling
List
Select the negative rate handling. It specifies the way how the system handles the negative reference rate. The predefined values are:
The negative base rate is changed to 0. If the reference rate value equals to or is smaller than 0, it is equated with 0. Only the contract margin rate is used for interest calculation.
The negative base rate is used, but the total cannot be negative. Thus, regardless of the reference rate value, it is used for interest calculation, but with the restriction that the total reference rate and the contract margin rate cannot be below 0.
Note: this parameter is available if the If Interest type = Floating or Floating penalty with interest.
Days in year
List
Select which day-count convention is used for calculating the accrued interest. Predefined values available:
ACT/360 (actual number of days in a month and 360 days in a year),
ACT/365,
30/365,
30/360.
Note: this parameter is available if the If Interest type = Floating or Floating penalty with interest.
,
,
and .
You can learn more about loan penalty calculation settings in .
To enable loan component-related penalties, tick the Penalty box in the particular loan component section and select values for the main .
Refer to the table in the Pricing chapter to configure the penalty pricing rules.
