Introduction
The Treatment of Investor Payments setting determines how investor disbursements are processed in relation to borrower payments. Users can select whether payments are decided on a per-loan basis, always withheld when borrower payments are not received, or always paid regardless of borrower payment status.
Navigating to Treatment of Investor Payments
Click the Gear icon in the top-right corner to open Settings.
Select Company Settings.
Use the left-hand navigation menu to expand Loan Servicing > Repayment.
Click Payment Method & Calculations > Treatment of Investor Payments.
Tip: If you cannot access Treatment of Investor Payments, ensure you have the necessary permissions or check with your administrator.
Treatment of Investor Payments Options
The system provides three different settings for handling investor payments:
Setting | Description |
Is Decided on a Loan-by-Loan Basis | Allows individual loan adjustments. When making adjustments using the Payments, Adjustments & Charges (PAC) module, an additional checkbox will appear: Pay Investors Regardless—this enables investor payments even if the borrower’s payment has not been received. |
Always Withhold Payments to Investors Whenever the Corresponding Borrower Payment Is Not Received | Investor payments are withheld if the borrower has not made a payment by the scheduled payday. This setting ensures that investors are only paid when borrower payments are received. |
Always Pay Investors Regardless of Whether the Corresponding Borrower Payment Is Received | Investors are paid on their scheduled payday, even if the borrower’s payment has not been received. This setting guarantees consistent investor disbursements, regardless of borrower payment status. |
Warning: If investor payments are set to be always paid regardless of borrower payments, there may be instances where investors are paid before borrower funds are received, potentially creating cash flow discrepancies.
FAQs
What happens if I select "Is Decided on a Loan-by-Loan Basis"?
This setting allows manual adjustments for each loan. In the PAC module, an additional option appears to pay investors regardless of borrower payments.
Can I change the investor payment setting after selecting an option?
Yes, but changing this setting will only apply to future payments. Past investor disbursements will not be affected.
What is the recommended setting for reducing risk?
For minimizing risk, the Always Withhold Payments option ensures that investors are only paid when the borrower has made a payment.
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