finPOWER Revolving Credit Loans
In the competitive finance market being able to offer products that are better suited to the individual demands of clients is key to long-term success. The Revolving Credit Module provides functionality that facilitates a flexible line of credit for clients that can have multiple drawdown’s, a variety of repayment options and flexible interest calculation methods.
Revolving Credit facilities have a wide range of uses that include:
- Development Loans
- Store Cards
- Floor Plan financing
- Agricultural and Horticultural Seasonal Accounts
The Client file includes information regarding contact details, past addresses, notes with action dates, a photo of the client and Loans and Deposits the client is associated with, either as the main lendee / lender, a joint name, a grantor or as a guarantor.
Revolving Credit Loan Types define essential default information such as the Interest type and base rate, facility fees, establishment fees and minimum payments.
Changes to the base floating interest rate are simply a matter of changing the rate on the Revolving Credit Type and this will flow through to the appropriate Loans.
Full information is kept on every Revolving Credit Loan.
Details such as the Loan Credit Limit, Review Date, Current Balance, Current Interest Rates, PPSR Security Information (a separate Add-On), Statement Cycle, Minimum Payment, Payment Schedules and a Notes Log is clearly presented. This provides all the information required to answer most queries at the click of a mouse.
Interest is calculated on the outstanding daily balance of the Loan. Interest can be either at a fixed or floating rate. All interest is calculated automatically in accordance with the Loan structure meaning month-end processes are streamlined.
Where a Loan balance exceeds its predetermined credit limit, the Penalty Interest Rate is charged on the overdrawn amount. Penalty Interest is expressed as a premium to the Loan’s interest rate.
Standard transactions can be created for each Loan and can recur on a regular basis. Standard Transactions can be calculated as being a set value, a percentage of the balance or a percentage of the Credit Limit. This could be used as additional facility fees or to enter Council Rates or Insurances the lender pays on behalf of the client to ensure the security remains intact.
Transactions from third party systems, such as Point of Sale Systems or other billing systems, can be imported into finPOWER. Transactions are then automatically updated to the appropriate Revolving Credit Loans thus streamlining much of the data processing requirements of a finance company.
There is a wide range of fees that can be automatically calculated and applied to a Loan.
- Establishment Fees. Calculated and applied at the creation of a new Loan. They can be calculated as being a set value or a percentage of the credit limit.
- Facility Fees. These fees are charged on a monthly basis and can be calculated as a set value, a percentage of the credit limit and / or a percentage of the unused portion of the credit limit on a daily basis.
- Withdrawal Fees. These are fees charged for withdrawals made against the Loan and can be calculated as a set value per withdrawal, a set value per month if one or more withdrawals are made or a percentage of the value of the withdrawals made.
- Overdrawn Fees. If a loan exceeds its Credit Limit during the month a set overdrawn fee can be applied.
The minimum monthly payment for a Revolving Credit Loan can be calculated in a variety of ways
Minimum repayments can be calculated using the following methods:
- Interest only
- A percentage of the outstanding balance
- A set dollar value
- The higher of a percentage of the outstanding balance or a set dollar value
- An ongoing set value
- Maturity basis given that the Loan has a defined maturity date
Minimum payments are calculated with the generation of the monthly statements and the Payment Schedule is updated accordingly. Direct Debits (a separate Add-On) can then be processed from this Schedule.
At the end of each month, the calculated minimum payment is added to the Payment Schedule and has a due date as defined in the Loan Type. In addition payment arrangements can be made and entered into the Payment Schedule, thus allowing for even greater flexibility in making repayment arrangements.
finPOWER provides an interface facility to all major NZ Trading Banks and many Australian Trading Banks. The interface can be used to import payment information directly from Banking Software to speed up payment processing.
Withdrawals can be entered via the Withdrawal Wizard that adopts a step-by-step approach to the transaction. Warning is given if the Loans credit limit is to be exceeded by the withdrawal.
Monthly statements can be generated and printed for clients. The statement details all transactions for the month as well as the minimum payment amount and the due date. Statements can be customised to reflect the finance companies professional image.