Receive a loan payment

Subscription Lending Management
Regional availability United States
User type Business user
Permissions

Lending Management

  • Loan payments: List, View, Add
  1. Go to Lending Management > All and select Add (circle) next to Payments.
    Alternatively, select Create on the Loan Payments page (Lending Management > All > Payments).
  2. Enter the Receipt date.

    The receipt date must meet the following requirements:

    • The date must be within an open period.
    • The date must be within a GL period that is opened.
    • The date must be within a period for which interest and statements have not been generated.

      If you need to post transactions to a period for which interest and statements have been generated, you can reverse the interest and statements for selected depository accounts. For those depository accounts, you can then post transactions to the period. Learn about reversing interest and statements.

    • For non-revolving (amortized) loans, the date cannot be prior to the following:
      • The last reamortization event.
      • The latest transaction date, if the transaction results in a reamortization event.

      You can find the last reamortization event and the latest transaction date on the Transaction History tab of the Loan Account page. Learn how to view the transaction history for a loan account.

    The receipt date is used as the journal entry transaction date in the general ledger. It is also used as the deposit date and the transaction date for the other cash receipt that's created for the payment in Cash Management.

  3. Enter the Customer.
  4. Enter the Loan account.
  5. Enter the Payment total.
  6. Enter the Payment method.
  7. Specify how to deposit the payment:
    1. In the Deposit to field, select the type of account to use:
      • Bank account: Select this if you already deposited the receipt.
      • Undeposited funds: Select this if you're accumulating receipts for deposit.
    2. In the related account field (which changes based on what you select in the Deposit to field), enter the specific account to use:
      • Bank account: Enter the bank account used for the deposit.
      • Undeposited funds account: Enter the GL account for undeposited funds. This account cannot be associated with a bank account. It must be an account that can be used as a transfer account so that the funds can be deposited later.
  8. You can review information about the loan in the Current loan balances section.
    For non-revolving (amortized) loans, this section includes extra fields that are not shown for revolving (non-amortized) loans:
    • Principal due
    • Interest due
    • Payments remaining

  9. Enter information in the Payment section.

    1. Enter the Payment amount. This is the amount being paid towards the principal and interest. It excludes any amount being paid towards fees.

      When you enter the payment amount, the amounts for the principal and interest are automatically calculated, as follows:

      1. Interest amount: This is paid as fully as possible (up to the Interest balance shown in the Current loan balances section).
      2. Principal amount: After the interest amount is entered, any remaining amount is entered for the principal.
    2. You can manually change the Principal amount and the Interest amount.

      If you change either of these amounts, the other amount is automatically recalculated so that they still add up to the Payment amount. For example, if you decrease the interest amount by 50, the principal amount is increased by 50.

    3. If you're receiving a fee payment, enter the Fee payment amount.

      If multiple fees are owed (shown in the Fees section), the fee payment amount is applied to the oldest fee first, then the next oldest, and so on.

    1. Enter the Payment amount. This is the amount being paid towards the principal and interest. It excludes any amount being paid towards fees.
    2. If you're receiving a fee payment, enter the Fee payment amount.

      If multiple fees are owed (shown in the Fees section), the fee payment amount is applied to the oldest fee first, then the next oldest, and so on.

    3. If there is an overpayment (the Payment amount exceeds the total of the Principal due and the Interest due), select how to handle the overpayment in the Overpayment handling field:
      • Apply to future payments: Applies the overpayment to future payments in the existing amortization schedule, beginning with the payment that is due next. For each payment, the interest is paid first and then the principal. The loan is not reamortized.

        Handling an overpayment in this way can result in a negative (prepaid) interest balance, which is allowed only if the Enable negative interest balances option is selected on the Configure Lending Management page. Learn about configuring Lending Management.

      • Reamortize loan: Calculates the adjusted loan balance, and then reamortizes the loan using the method selected in the Reamortization method field.

        The adjusted loan balance is calculated using amounts in the Reamortization details section, as follows:

        Principal balance before payment + Interest balance before payment + Accrued interest − Payment amount = Adjusted loan balance

        Effectively, this pays all interest accrued up to the date before the payment, then applies the remainder of the payment amount to the principal to determine the new (adjusted) loan balance. The loan is reamortized based on the Adjusted loan balance.

    4. If you selected Reamortize loan in the Overpayment handling field, select how to reamortize the loan in the Reamortization method field:
      • Retain current payment amount: The new amortization schedule has the same payment amount as the old amortization schedule, but the number of payments remaining is reduced.
      • Amortize loan over remaining terms: The new amortization schedule has a number of payments equal to the number of payments that were remaining for the old amortization schedule, but the payment amount is reduced.
    5. Before reamortizing the loan, you can check to see what the new amortization schedule will look like with the options you've selected. Select Preview amortization schedule in the Reamortization details section.
    After reamortizing a loan, you can view the loan's old amortization schedule from the Transaction history tab of the Loan Account page. The Notes field for the payment transaction provides a link to the old amortization schedule. Learn how to view the transaction history for a loan account.

  10. Select Post.

    Posting creates the following transactions: