Mambu Banking Engine

Ideas aimed to improve the current experience provided by the Mambu Banking Engine.

Offset Loan - Amortisation Schedule

What?

The Amortisation Schedule determines how the Loan Balance reduces over time if all repayments are made on time (it is very similar to the outstanding principal balance that Mambu could calculate on its repayment schedule). The loan balance on the amortisation schedule is referred to as the Scheduled Balance of a loan. The Amortisation Schedule is not a payment schedule (see LNN-I-4).

Amortisation Schedule

Loans amortise (i.e. are expected to reduce in principal balance) with a monthly frequency which aligns with the interest capitalisation frequency (see DPS-I-9).

The amortisation schedule needs to be calculated based on the interest period type. DBEI in case of variable-interest-rate periods (indexed interest rate) and fixed-interest-rate periods. Or only expect interest from the borrower in case of interest-only periods. See comments below for details for these types of interest periods and LNN-I-6 for use cases for transitions between different types of interest periods. 

Minimum Repayment Amount

  • The amortisation schedule determines the Minimum Repayment Amount that needs to be made over a monthly period (see LNN-I-4). This can be DBEI or only an interest that 
  • Minimum Repayment Amount is a total amount of e.g. $1,500 without breakdown into principal and interest. It is just principal since interest is capitalised into the principal balance.

Scheduled Balance

  • The Scheduled Balance is instrumental to calculating the amount available for redraw (see LNN-I-7).
  • The Scheduled Balance is instrumental in calculating due/overdue amounts and determining arrears. If the actual balance of the loan is higher than its scheduled balance, the loan is in arrears.
  • The Scheduled Balance will be recalculated when the indexed interest rate changes or customers lock in fixed interest rate and interest-only periods.

Why?

This is common market practise in Australia. A separation between amortisation and repayment schedules is also a common approach in other markets.

Note - This requirement is more general but overlaps with APP-I-1214 (dynamic loans)

  • Sascha Dannroth
  • Nov 1 2018
  • Planned
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