1.         Payment rate %

2.         Payment rate diff %

 

These two adjustments work by reducing the interest rate used when calculating the monthly amount the client should be paying.

 

 

Example C1

 

Loan     50,000              Interest Rate                  10%

January 2001                 31 days interest             = 424.66

                                    Payment                       = 416.67

 

 

 

If we applied the ‘payment rate %’ (1) to the example B1, we would see the following effect:

 

Example C2

 

Loan     50,000              Interest Rate                  10%

January 2001                 31 days interest             = 424.66

 

Set Payment rate = 7.5%

 

                                    Payment                       = 312.50

 

As we can see from this example the payment has dropped, being based on the lower rate of 7.5%.

 

We could have set the ‘payment rate %’ to -2.5, which would have had the same effect (e.g. 10 - 2.5 = 7.5). Note: On the printed / file output when an equal sign ‘=’ is shown, this indicates a positive value was entered.

 

 

If we applied the ‘payment rate diff %’ (2) to the example B1, we would see the following effect:

 

Example C3

 

Loan     50,000              Interest Rate                  10%

January 2001                 31 days interest             = 424.66

 

Set Payment rate diff = 10% (This is 10% of the 10% = 1% reduction)

 

                                    Payment                       = 375.00

 

Note that using a negative ‘payment rate diff %’ will increase the interest rate % used to calculate the client’s payment. Note: On the printed / file output when an equal sign ‘=’ is shown, this indicates a positive value was entered.

Related Topics

Adjustments