Paying-off a Loan
- Updated On 18 Jun 2020
- 1 Minute To Read
Paying off a Loan Account
A Pay Off is a prepayment that covers the whole amount due as of a given date, when the client wants to fully pay their loan earlier than initially agreed and thus close their loan account. It is also sometimes called "early settlement" or "early closure" of a loan account.
To pay-off a loan, go to Close > Pay-off .
When paying-off a loan, all principal, interest, fees and penalties balance will be paid. Users who have the permission to "Apply Loan Adjustments" will also be able to reduce or completely waive interest, fees or penalties by changing the amounts to be paid.
To pay-off a loan, the user needs to have both permissions to "Pay-Off Loan Accounts" and "Enter Repayments".If you want to waive or reduce some of the interest or fees that are due, then the "Apply Loan Adjustments" permission will be required in addition to the first two.
If you don't waive any of the amounts due, when paying-off a loan, there will be a repayment transaction logged for the remaining balances, i.e. principal + interest + fees + penalty (if applicable).
When paying-off a loan the sequence of events happening in the back-end is the following:
- Any future interest (not yet due or pre-paid) will be ignored, i.e. not considered due and not included in the amount to be paid to close the account
- A repayment transaction is logged for the total amount paid
- The account is automatically closed (with all obligations met)
If you have a question about how anything works or have come across something you haven't seen explained here, get in touch with our community of fellow users and Mambuvians where someone will lend a hand.
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