Repayment Allocation Order
- 26 Oct 2021
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Repayment Allocation Order
- Updated On 26 Oct 2021
- 1 Minute To Read
- Print
- DarkLight
- PDF
Article summary
In cases of prepayments, partial repayments, or payments of fees and penalties, the allocation order established at the product level dictates the sequence of payments. For instance, if fees are prioritized, they will be paid first, followed by penalties, interest, and finally the principal amount. To set this allocation order, users should navigate to the Repayment Collection section of the form, where they can drag and drop items to arrange them according to their preferred payment sequence. This order can be modified later by editing the loan product or through the API. The flexibility in adjusting the allocation order allows for tailored repayment strategies based on individual preferences or circumstances.
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For cases of prepayments, partial repayments or fees and penalties payment, the allocation order defined at the product level will determine what will be paid first.
Suppose you wanted the fees to be paid first, then penalties, interest, and finally principal. In this case Fees would be on top of the list and Principal on the bottom.
Set the allocation order
To set the order of the items to be paid:
- When setting up new loan products, go to the Repayment Collection section of the form.
- Drag and drop items to arrange them according to the order in which you want them paid on partial or overpayments.
The allocation order you set here can later be changed either by editing the loan product or by making a custom repayment via the API.
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