Navigation: Admin >> Loan Penalty Settings >> Edit Loan Penalty Settings

Description: 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 Edit Loan Penalty Settings page.

 

There are two types of penalties that can be applied to loans: Late Repayment Penalty and After Maturity Date Penalty.

 

Late Repayment Penalty
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.

Enable Late Repayment Penalty?

Check this field if you want enable penalty on late repayments.

  • I want Penalty to be percentage % based
  • I want Penalty to be a fixed amount
You can select one of the above options.

Penalty Interest or Fixed Amount
  • If you selected I want Penalty to be percentage % based above, enter the penalty interest to loans with late repayments. This penalty interest will be calculated on the repayment overdue amount that has not been paid.
  • If you selected I want Penalty to be a fixed amount above, enter the fixed amount that will apply to loans with late repayments.

(optional) Grace Period
Enter number of days after the due date during which penalty will not apply. So the penalty will only be calculated after the grace period.

(optional) If penalty on Late Repayments is recurring, enter the number of days
Enter 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.

After Maturity Date Penalty

Check this field if you want enable penalty on loans that have not been fully paid by the maturity date.

  • I want Penalty to be percentage % based
  • I want Penalty to be a fixed amount
You can select one of the above options.

Calculate Penalty on
If you selected I want Penalty to be percentage % based above, this field will become active. Select whether to calculate the penalty on the Overdue Principal Amount or Overdue Principal Amount + Overdue Interest.

Penalty Interest or Fixed Amount
  • If you selected I want Penalty to be percentage % based above, enter the penalty interest to loans with late repayments. This penalty interest will be calculated on the repayment overdue amount that has not been paid.
  • If you selected I want Penalty to be a fixed amount above, enter the fixed amount that will apply to loans with late repayments.

(optional) Grace Period
Enter number of days after the due date during which penalty will not apply. So the penalty will only be calculated after the grace period.

(optional) If penalty on After Maturity Date Loans is recurring, enter the number of days
Enter 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.


By default, the above settings will apply to new loans only. If you want the above to apply to existing open loans and defaulted loans, you can select the appropriate option below.

Please be very careful with the below settings

Penalty settings will automatically apply to New loans. However you can also apply penalty settings to existing loans by changing below settings.

If you select Fully Paid and/or Defaulted loans, then it might convert them into Open loans if new penalty settings are applied.

If you select Open loans, then it might convert them into Fully Paid loans if new penalty settings are applied.


Apply Penalty Settings to
  • Defaulted Loans
  • Open Loans