There was a necessity to tailor loan repayments to accommodate the money movement patterns for the debtor.
Migrated over from MifosForge – final edit on September 15, 2015.
- This particular feature enables a person to
Background and strategic fit
This is especially valid of items like agricultural loans where consumers money flows could be very volatile. Consequently returns such sectors are seasonal, unpredictable and frequently less than those associated with regular commercial enterprises for which MFIs disburse loans. This necessitates the necessity for finance institutions to modify loans products, which enable more freedom utilizing the installment routine.
The adjustable Installment Loans function of Mifos X accommodates this flexibility by indicating:
For the loan item:
Minimal and maximum gap that should always be current between installments (minimum is mandatory, but maximum is optional)
An optional minimum installment quantity
Allow installment dates that are due be modified
Allow installment amounts to be modified (either total installment or major part is modified)
Include extra installments
Validate the routine and calculations after making these modifications
Adjustable Installment might be specified for loans which have either flat interest calculation or diminishing stability based interest calculation
For a provided loan routine, individual may either alter principal or amount that is installmentand never both)
Consumer could make these adjustments only ahead of loan account approval.
Consumer may alter the date of all of the installments.
Consumer might not alter the quantities when it comes to installment that is last.
Then the other will be automatically calculated by Mifos if the user enters an amount for either principal or installment amount.
The consumer may specify adjustable installments in 3 situations:
1) Flat Interest Rate
2) Interest predicated on Diminishing Balance
3) Interest predicated on Diminishing Balance with Interest Recalculation
Situation 1: Flat Interest speed: Mifos will likely not recompute interest for every installment. And also the total interest will stay just like it had been if the initial schedule had been created.
Consumer alters times: Date may not be before past installment date or following the next installment date. The brand new date is accepted. No other modification.
Consumer alters amount that is principal This quantity is zero. The quantity is accepted. The installment quantity is determined by Mifos as „Installment Interest“ + the amount that is principal. The distinction in quantity (between newly specified principal and initial principal for the installment) will undoubtedly be equally distributed among other installments principal which were maybe maybe maybe not modified.
User alters installment amount: Amount could be zero too. In the event that quantity specified is higher check n go payday loans colorado than the attention, then a principal amount is determined by Mifos as installment amount specified without the „Installment Interest“. In the event that quantity specified is lower than the attention quantity for the installment, then your interest is scheduled to the value. The distinction in major quantity or interest quantity (between newly specified quantity and amount that is original the installment for both interest and principal) may be similarly distributed among other installments (principal and interest) which were not modified.
Scenario 2 and 3: Interest centered on Diminishing balance (without or with interest recalculation)
Consumer modifies times: Date may not be before past installment date or following the next installment date. The brand new date is accepted. The attention regarding the installments that follow the modified installment will be recalculated predicated on major outstanding and wide range of days of each installment.
Consumer modifies amount that is principal This quantity could be zero. The total amount is accepted. The huge difference in major quantity (between newly specified quantity and amount that is original the installment) will likely be similarly distributed among other installments‘ principals which were not modified. The interest regarding the installments that follow the modified installment will likely to be recalculated centered on major outstanding and wide range of times of each installment.
Consumer alters installment amount: Amount may be zero too. If the quantity specified is higher than the attention, then your principal amount is determined by Mifos as installment amount specified without the „Installment Interest“. Then the interest is set to this value and the difference in interest is either added to the next installment (if compounding is turned off) or added to principal if compounded is turned on for this loan product if the amount specified is less than the interest amount for the installment. The attention on the installments that follow the modified installment will be recalculated according to major outstanding and amount of times of each installment.
The attention recalculation may be in line with the configuration that is relevant of loan item as specified at: adjustable Installment Loans
For Loan Products
|Can configure installments that are variable denoting whether this loan item help variable installments||real or False. Blank w. Ould suggest False.|
|Minimal space between installments||Integer value that denotes the minimal amount of days that have to be current between any two installments because of this loan item.|
|Optimum space between installments||Integer value that denotes the most amount of times that have to be current between any two installments because of this loan item.|
|Minimal installment quantity||Integer value that denotes the minimum installment quantity.|