Introduction

The loan capitalisation/deduction functionality is designed for adjustment or restructuring of various components of a loan. This feature simplifies the repayment process and can be used to reorganise the loan.

For instance, adding loan fees to the principal balance simplifies the repayment process as the fees are included in the principal amount rather than paid separately. Alternatively, deducting loan fees from the principal before loan disbursement ensures the fees are settled before the loan payout.

Definitions

• Fee capitalisation - adding loan fees or other loan components to the principal balance.

• Fee deduction - deducting loan fees or other loan components from the principal before loan disbursement.

Use cases

The loan capitalisation or deduction can be used in the following use cases:

Search capitalisation

To search for existing capitalisations:

1. Loans > Search > Contracts.

2. Find a loan contract > click the Contract number to open the contract in question.

3. From the content menu, choose Billing > Capitalisations.

4. On the capitalisation details page, you will see the list of all existing capitalisations.

5. You can also search capitalisations by status and select one of the following statuses:

   • Inserted,

   • Processed,

   • Reversed.

6. Click the identifier to view the capitalisation details.

Reverse capitalisation

2. Click the Reverse capitalisation button.

1. Enter a description for the capitalisation reversal > Save.

Create manual disbursement

To create a manual disbursement:

1. Loans > Search > Contracts > find a contract in question.

2. Click the Contract number to access the contract details.

3. From the content menu, choose Payouts.

4. On the Payouts page, click the Create payout button.

1. Click Save to initiate the disbursement.

Reverse manual disbursement

1. Loans > Contracts > find a contract in question.

2. Click the Contract number to access the contract details.

3. From the content menu, choose Payouts.

4. On the Payouts page, search for the payout that needs to be reversed.

1. Click the Identifier to view the details > click the Reverse payout button.

1. Fill in the Description > Save.

While configuring a new loan product or updating an existing one, you can choose the repayment method for automatic capitalisation.

To configure the fee repayment method, go to:

1. Loans > Products > Loan products.

2. Create a new product or find an existing one you want to update.

3. Scroll to the Fees section:

1. In the fee setup screen, configure the How fee is repaid parameter:

1. When adding a new fee, click Add new. When editing an existing fee, click Apply.

Check automated capitalisation and deduction

If the capitalisation is defined on a product level, it will occur automatically, and you can check the capitalisation/deduction details:

To create loan capitalisation manually:

1. Loans > Search > Contracts.

2. Find the loan contract > click the Contract number to open the contract in question.

3. From the content menu, click Billing > Capitalisations.

4. On the capitalisations page > Click the Create capitalisation button.

1. Fill in the form capitalisation parameters > Create.

1. Click Create when done.

To book a fee with capitalisation:

1. Loans > Contracts > find a contract in question.

2. Click the Contract number to access the contract details.

3. From the content menu, click Fee bookings.

4. On the Search contract fees page, click the Book new fee button.

5. Fill in the fee booking details and select the Repayment type option.

1. Click Save when done.