Introduction
Origination payment settings define how borrower payments, investor payouts, and interest calculations are handled at loan setup. Understanding these settings ensures smooth loan servicing and accurate financial management.
Navigating to This Section
1. Click the Gear icon in the top-right corner to open Settings.
2. Select Company Settings.
3. Use the left-hand navigation menu to expand Loan Setup/Origination.
4. Locate Payment Methods & Calculations.
Tip: If you cannot access this section, ensure you have the necessary permissions or contact your administrator.
This setting determines how interest is calculated for partial months before the first full payment.
Best Practice: Setting a default IAD method ensures uniform calculations and reduces manual adjustments.
Defines how borrower and investor payments are scheduled, including whether investor payouts align with borrower payments.
Note: By default, borrower payments are set to the 1st of each month.
Allows borrowers to make payments on a schedule that fits their needs. Options include monthly, weekly, bi-weekly, semi-monthly, and quarterly payments.
Best Practice: Enable only the frequencies applicable to your loan offerings to reduce complexity.
Determines how interest accrues over time, with options like per-diem, 360/365, Actual/360, and 30/360.
Tip: Choosing a default interest method minimizes manual configurations during loan setup.
Controls how principal, interest, and per-diem calculations are rounded, ensuring consistency in financial transactions.
Tip: If unsure, leave rounding settings off, as the system defaults to four-decimal rounding.
FAQs
How do I choose the best interest adjustment default?
It depends on your preference for accuracy versus standardization. Actual days in the year provide precise interest accrual, while 30/360 simplifies calculations.
Can I change loan payment settings after origination?
Yes, but modifying pay dates or frequencies may require borrower consent and could impact amortization schedules.
What is the difference between 360/365 and Actual/360?
360/365 assumes a fixed 360-day year for all loans, while Actual/360 accounts for actual days per month.
How does semi-monthly payment selection impact calculations?
Choosing 1st & 16th versus 1st & 15th shifts payment due dates, which can affect cash flow forecasting.
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