Locking and Unlocking Loans
  • 15 Mar 2022
  • 3 Minutes To Read
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Locking and Unlocking Loans

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Mambu allows you to lock and unlock loan accounts to better manage situations where you need to stop applying interest, fees, or penalties to them.

Locked accounts do not accept transactions posted to them unless a user has permission to Post Transactions on Locked Accounts (POST_TRANSACTIONS_ON_LOCKED_LOAN_ACCOUNTS).

Locking loan accounts

To lock a loan account:

  1. Open the loan account you want to lock.
  2. On the right-hand side of the screen, select More > Lock Account.
  3. In the Lock Account dialog, select whether to suspend interest, fees, and/or penalties. You may optionally enter any comments in Notes. For more detail on the activties you may susped, see below.
  4. Select Lock Account.

There are three activities you may choose to suspend on a locked account:

  • Applying Interest: Interest will still be accrued, but it will not be applied, meaning no Interest Applied transactions will be logged during the time the account is locked.
  • Applying Fees: Fees will not be applied at all, meaning no Fee Applied transactions will be logged during the time the account is locked. This applies only to late repayment fees.
  • Applying Penalties: Penalties calculated on the outstanding principal balance and penalties calculated on the overdue balance will be accrued, but not applied, meaning no Penalty Applied transactions will be logged during the time the account is locked.

Lock loan option with the available activities to suspend

You may change the settings of which activities are suspended for a locked account at any time. For example, fees can additionally be locked on the account where interest has already been previously locked. These updates can be made with the Lock Account function. Details of the activity currently locked will be displayed in the account’s overview.

Please Note

There is no accounting layer supporting the locking functionality. If a particular activity on a loan account is locked, it is simply not recognized in the ledger at all.

All activities and dates associated with locking and unlocking will be tracked in the account's transactions, allowing you to use custom view reports in order to audit these accounts and manage any further workflows required like follow-ups or specific collections activities.

Please be Aware
  • Automated transfers will not be made if the account is locked.
  • Mambu will not automatically move loan accounts which have been Locked into In arrears once the arrears tolerance period has passed.

Unlocking loan accounts

When you unlock a loan account, all the suspended activities will be unlocked and automated transactions will resume.

To unlock a loan account:

  1. Open the loan account you want to unlock.
  2. On the right-hand side of the screen, select More > Unlock Account.
  3. Select Unlock Account.

Once an account is unlocked, all the locked activities are unlocked and as a result:

  • The account goes back to the state it was before being locked, either Active or in In Arrears.
  • The total amount of interest accrued during the time when the account was locked will be automatically applied and the corresponding Interest Applied transaction will be logged in the Transactions tab.
  • Fees will start to be applied again from the date the account is unlocked.
  • Penalties calculated using the overdue balance methodology based on Overdue Principal or Overdue Principal + Overdue Interest will start to be accrued and applied again from the date the account is unlocked.
  • Penalties calculated using the outstanding balance methodology that were accrued when the account was locked will remain accrued and be applied to the account on the installment due date.
  • The respective unlocked transactions will be logged on the account under the Transactions tab.
Please Note

Each of the activities that were locked can be unlocked separately by using the Lock Account function. Once one of the activities is unselected, it will be considered unlocked and the appropriate transaction will be logged in the Transactions tab. We don't recommend that you use this option to change the state of the account as such: even if all the activities in the locking screen are unselected, the state of the account will remain Locked until you unlock the account.


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