Consumer Loan Refinance

Consumer Loan Refinance

Purpose

A Fixed Loan may need to be refinanced due to:
  1. Debtor hardship so the same outstanding amount needs to be repaid over a longer period
  2. Debtor wants to top up their Loan
In either circumstance the steps are the same

Process

Identify the relevant details from the existing loan

  the Loan Account Details and take a note of the Instalment Frequency, Interest Rate (if that is to remain the same), Standard Instalment Amount, Region, First Analysis, Source, Dealer Account and Associated Parties


 
  – Ascertain the loan value as at the refinance date
It is usual to charge the Early Termination Fee to 0.00 

Create a Quote for the new (Refinanced) Loan

Refer to Fixed Loan Quote Creation for details on setting up and processing a quote
  1. Complete the Quote Details dialog by selecting the existing client. Changes to client contact details can be made at this time
  2. Select the Dealer, Region and First Analysis Code as recorded on the original loan
  3. Enter date to comply with refinance requirements
  4.  
    1. If a top up enter the extra amount against the Advance Amount
    2. Enter the old loan amount per the Early Termination Enquiry against the Refinance Amount
    3. Construct the repayment profile so that it complies with the new payment amount agreed (hardship) or new payment amount required (top up)
  5.  - Copy existing collateral to this quote
  6.  - Add details of any new security being taken
  7.  - Select any associated parties that were on the original loan
  8. Check dates are correct
  9. Load 
  10. Load 
  11.  and  the quote

    1. Select the Communication Type that is used for Variations
    2. Select the Communication Type for Direct Debit form

Create new account and close old account

Once the signed Variation document has been returned:
  1. Refer to Settling a Quote into an Account
Once the new account has been created:
  1. Access the old loan account and Early Terminate using the same values as the termination quote
  2. Process a   for the balance of the old account to the Dealer account
    This will “Payout” the old loan and reduce the dealer liability
  3. Close the old loan as it will have a 0.00 balance
  4. Payout the top up amount to the borrower

    • Related Articles

    • Fixed Loan Finance Details

      Purpose To provide a breakdown of the loan cost items and allows the management of instalments Timing The Finance details may be accessed at any time. Instalments may be altered during the life of the loan. It is recommended that if further funds are ...

    • Fixed Loan Account Type Setup

      Purpose The Fixed Loan Account Type details setup will specify the calculation rules, Transaction Types and General Ledger codes that are used to post control transactions on the Fixed Loan Account. Access Account | Edit/View Account Types | | ...

    • Fixed Loan Account Fields

      Field Explanation [HPACC_ARR+LETFEE] Arrears and letter fee This is the current (arrears) balance plus the letter fee generated during the letter run [HPACC_ARR+LETFEE+ACRINT] Total of arrears plus the letter fee and accrued interest (penalty) ...

    • Fixed Loan Early Termination Details

      Purpose To calculate Early Termination (settlement) figures for a Fixed Loan Access from the Fixed Loan Account Details dialog Dialog Details Details Specific Fields Early Termination Section Field Explanation Termination Reason Not required for a ...

    • Fixed Loan Control Details

      Purpose Provide control details for the month end roll over process, key setup parameters and allow file paths to be selected for custom reports Access Fixed Loan | Edit/View Fixed Loan Control Details Dialog Details Details Specific Fields Field ...