Ideas for the Mambu Banking Engine

Defer interest surplus added to instalment as a result of pre-payment when original PMT amount is exceeded

What:

Dynamic Loan with equal instalments: To defer interest surplus added to instalment as a result of pre-payment when original PMT amount is exceeded. The deferred interest amount should become due with the last instalments, as oppose to increasing the upcoming instalment.

Why:

With specific loan terms (high interest rate, low balance, high number of instalments), when a repayment is posted prior to the due date, recalculated interest amount can exceed the original PMT amount calculated at loan creation. As a result a customer is "penalized" for making early payment since upcoming instalment will be higher that originally expected.

  • Szymon Kłapciński
  • Jan 29 2020
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