Variable Loan Interest Rate Change Notifications
Purpose
To automate
the process of creating interest rate change advice notices with updated calculated values.
The
system will:
- Generate a list of accounts affected by a rate change percentage
- Create communications advising the change of rate
- Allow the creation of a Direct Debit Schedule on each account if required
- Post the new interest rate to the account
Timing
Generation
of the predicted instalment amounts and/or maturity date and creation of change
advice communications would typically be undertaken two – three weeks before
the effective date of the future interest rate change.
Posting
of the new Instalment Amount or Maturity Date for each account will be
completed on the first business day following the interest rate change date.
Prerequisites
Master Communication Setup
A
Master Communication should be setup for the letter advising clients of the
change to the interest rate, and their repayment terms. There are specific communication
replacement fields created by the process that will be used.
Payment Cycle Setups
Payment Cycles may be setup and allocated to each Variable Loan account. These are setup on the Variable Loan Account Details dialog.
Access
- Variable Loan | Create & Maintain Interest Rate Notifications
Dialog
Field | Explanation |
Status | Defaults to All |
Payment Cycle | [F2] to If blank, all loans will be included in the process |
Interest Rate Date Change Range From - To | Enter a date range that will be compared to the Next Interest Date on each loan account defined on the Interest Details dialog on the Variable Loan Accounts |
Interest Rate Change Percentage | Enter the Interest Rate Change Percentage that will apply to the displayed accounts This may be a positive or a negative value The % entered may only be between -10% and +10% |
OCR Rate Change Date | Enter the date the OCR Rate Change to be disclosed in the notification communication This date cannot be in advance of todays date The date can be back dated |
Communication Type | [F2] to |
Process
Generate Interest Rate Notifications
The
accounts requiring an Interest Rate Notification Change are displayed once the 
function has been completed.
The
dialog will display a list of accounts found that match the parameters entered in the search box. These should be reviewed to ensure that all expected accounts are included before the process
is completed.
Manage Accounts for an Interest Rate Change
Once
the list is generated, the Accounts displayed may be reviewed more thoroughly
in order to deal with any exceptions.
When the 
button is selected for an account the Edit Interest Rate Change Notification Details dialog will display.
From here you can access the Account you are working on.
A Rate change can then be set with the default OCR Rate change percentage and date or overwritten with specific values for each account.
You can set whether the account will be Interest Only or Principal and Interest.
The Communication Type will default to the once selected on the Browse dialog. If this needs to be changed for a specific account this can be changed here.
To set an account to post a rate change select the 
button.
To close the dialog without saving any changes select the 
button.
Post the Interest Rate Changes
A backup should always be taken
immediately prior to the planned rate changes being posted.
This
process will:
- Update the the Instalment Amount
- Create a direct debit schedule for Interest Only Loans
- Update the direct debit date/amount/frequency as required.
- Post the Interest Profile or Interest Base Rate line, resulting in the interest rate change being applied to the account
Set the Status to Ready to Post, review the accounts listing. Select 
display the wizard.
Click 
- to post. 
may be used if further review is needed.
Once the progress bar is complete, Click | 
to return to the Tree Menu.
Result
The accounts will not longer display in the Interest Rate Change Notification Browse .
For an Principal and Interest account, Instalment Amount will be
updated on the Account Details dialog.
For an Interest Only Account a Direct Debit Schedule will be created for the Interest Only period and the Instalment Amount will be updated on the Account Details dialog to take effect once the Direct Debit Schedule has been completed
The Interest Profile rates will be updated with the new interest rate and date the rate is effective from. This will sit with the posted flag unchecked until the Interest Posting after this date has taken place. Once the posting takes place the rate line will be updated to Posted and a Rate Change transaction will have posted to the account with a value date that
the interest rate change was applied on the interest profile. Interest will be calculated at the new rate
from this date forward.
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