Non-Scheduled Fee Allocation

Non-scheduled fee allocation offers enhanced flexibility for managing manual fees on loan accounts. This functionality allows you to apply fees to an account and track them in a distinct Fee balance without automatically adding them to the next scheduled installment payment.

Set up non-scheduled fee allocation

To enable non-scheduled fee allocation, you must configure a new fee type during product setup.

1. Navigate to Product Setup to access the relevant loan product in your Mambu environment.
2. Within the product configuration, add a new fee. The type should be Manual.
3. When defining how the fee is collected, select No Allocation. This ensures the fee is placed directly into a separate fee balance and does not impact the regular repayment schedule.
   
4. Note that you cannot choose to capitalize non-scheduled fees at application.
   

Once a manual fee is applied with No Allocation, it will be handled as follows:

• Each application of a non-scheduled fee is logged in the account's transaction history. The corresponding transaction details will include specific information related to the non-allocated fee.
• The non-scheduled fees will contribute to separate Non-Scheduled Fee Balance and Non-Scheduled Fee Paid balances visible directly on the loan account details page. These balances are distinct from any amounts tied to the repayment schedule
• Non-scheduled fees operate independently of your regular repayment schedule. This means they won't ever show as "due" and won't be part of your Fees Due balance. However, keep in mind that these amounts will still contribute to the total balance of your account.

Balances after fee application	Balances after fee repayment

Total balance of the account

• Repayment for the non-scheduled fee is exclusively handled through the Custom Repayments feature. This allows for flexible collection outside of the regular installment cycle.
  • To collect a non-allocated fee, select Custom repayments and choose Non Scheduled Fees for the Repayment Item.
    

Fees maintained outside the schedule

Flexible fee application, or fees maintained outside the schedule, allows you to apply fees to loan accounts without a mandatory allocation to the repayment schedule. This provides greater flexibility for both lenders and borrowers.

Features

• Fees can now be designated as 'non-scheduled' during application.
• Non-scheduled fees do not accrue interest.
• The repayment of these fees is not automatically enforced through a specific scheduled installment.

How it works

• When applying a fee (via UI or API), choose the new option to make it 'non-scheduled'.
• The fee will increase the total outstanding balance.
• Importantly, it will not automatically change the borrower's regular scheduled installment amount.
• As a result, the fee adds to the total outstanding balance but does not accrue interest. It also won't automatically change the borrower's scheduled installment payment, allowing the lender to define a separate collection process.

Schedule allocation

During the fee application process, users have an option called the Schedule Allocation Method, where they can specify whether the fee should be allocated to the schedule or applied without schedule allocation (No allocation).

Non-scheduled fees will increase the outstanding balance but won't modify the installment amounts on the existing repayment schedule. Lenders can define processes for how these fees are collected.