Terminating a Loan
  • 09 Jun 2021
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Terminating a Loan

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When you terminate a loan, the total outstanding principal plus all accrued charges become due immediately (as of the termination date).

To terminate a loan account, you must have the Terminate Loan Accounts permission.

This feature is currently available for:

  • Dynamic Loans
  • Interest calculation method: Declining Balance Equal Installments
  • Pre-payment allocation: On upcoming pending installment only
  • Pre-payment recalculation: Reduce Number of Installments (RNI)
  • Types of fee allowed: Manual Fees only

Terminating a loan account

To terminate a loan account:

  1. Open the loan account.
  2. On the right-hand side of the screen, select Close > Terminate.
  3. Enter the reason for terminating the loan.
  4. Choose the current date or a date in the past.
  5. Confirm.

The Terminate loan account option under Close

Please note

When a loan account is terminated, the number of installments in the schedule is kept the same, only the state of the installments is changed.

You can also terminate a loan using the API by making a request to a dedicated endpoint:

GET /api/loans/{loanAccountId}:terminate

using the payload

{
    "valueDate":"2021-01-30T00:00:00+00:00",
    "notes":"Notes about the account termination process"
}

For more information, see our API documentation.

Undoing loan account termination

You can undo the termination of a loan account by adjusting the termination transaction.

  1. Open the loan account overview page and go to the Transactions tab.
  2. Find the terminated transaction and, on the right-hand side of the screen, select Actions > Adjust.
  3. Select Undo Loan Account Termination Transaction.

Adjust the terminate transaction to undo the loan account termination

Please be aware

You can't undo an account termination if there is a transaction posted after the termination that cannot be adjusted (such as INTEREST_LOCKED).


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