Navigation: Admin >> Loan Penalty Settings
Description: View and add penalty settings for late repayments on loans and/or loans that have not been fully paid by the maturity date. These penalty settings will apply to all loans in your account. The system will automatically add the penalty to the loans once per day. Please note that you can manually override the system penalty by editing the loan.
The following fields are present in the Loan Penalty Settings page.
There are two types of penalties that can be applied to loans: Late Repayment Penalty and After Maturity Date Penalty.
By default, the Late Repayment Penalty and After Maturity Date Penalty are disabled.
Penalty that will apply to loans where repayment has not been made by the due date. For example, if the repayment is due every Monday and the borrower fails to pay, the system will automatically add penalty to the loan based on the below settings.
Penalty Interest / Penalty Fixed Amount
This field can be Penalty Interest or Penalty Fixed Amount. When you edit the loan penalty settings, you can specify if you want the penalty to be a percentage of the overdue amount or a fixed amount.
Grace Period
This is the number of days after the due date during which penalty will not apply. So the penalty will only be calculated after the grace period.
Is Penalty on Late Repayments Recurring?
This is the x number of days for recurring penalty. So the recurring penalty will be applied to the overdue loans every x number of days. So if the value is 7 days, then the penalty will be calculated every 7 days until the overdue amount is fully paid. Please note that the first penalty will be applied after the Grace Period if any.
After Maturity Date Penalty
Penalty that will apply to loans that have not been fully paid by the maturity date. For example, if the maturity date is 31st January and the borrower fails to pay, the system will automatically add penalty to the loan based on the below settings.
Calculate Penalty on
This field indicates whether to calculate the penalty on the Overdue Principal Amount or Overdue Principal Amount + Overdue Interest.
Penalty Interest / Penalty Fixed Amount
This field can be Penalty Interest or Penalty Fixed Amount. When you edit the loan penalty settings, you can specify if you want the penalty to be a percentage of the overdue amount or a fixed amount.
Grace Period
This is the number of days after the due date during which penalty will not apply. So the penalty will only be calculated after the grace period.
Is Penalty After Maturity Date Recurring?
This is the x number of days for recurring penalty. So the recurring penalty will be applied to the overdue loans every x number of days. So if the value is 7 days, then the penalty will be calculated every 7 days until the overdue amount is fully paid. Please note that the first penalty will be applied after the Grace Period if any.