Loan product settings

This is step 4 of the create wizard. It is the longest step: core schedule rules first, then toggles that reveal extra fields only when they are on.

Schedule and interest method

• Amortization — equal installments or equal principal.
• Interest type — declining balance or flat.
• Equal amortization — a separate toggle. It cannot be combined with interest recalculation, variable installments, or multi-disburse.
• Interest calculation period — daily or same as repayment. Partial-period interest is only valid when calculation is not daily.
• Transaction strategy — how a payment is allocated. Names come from Fineract; the list is whatever this tenant ships.
• Loan schedule type — cumulative or progressive.
• Schedule processing — horizontal or vertical. Vertical also needs the advanced strategy.
• Days in year and days in month.

Transaction strategy options

• Penalties, Fees, Interest, Principal order — usual Mifos order: charges first, then interest, then principal. The cash-accounting walkthrough saves this on a normal product.
• Overdue/Due Fee/Int, Principal — overdue fees and interest, then amounts currently due, then principal.
• Principal, Interest, Penalties, Fees Order — principal before interest, so outstanding falls faster.
• Interest, Principal, Penalties, Fees Order — interest before principal.
• Early Repayment Strategy — extra payments pay the loan down early instead of walking the standard due-component order.
• Advanced payment allocation strategy — required for progressive schedules and vertical processing. You then edit payment allocation (and optionally credit allocation) on this step. There must be a default allocation; due types stay grouped on a horizontal schedule.
• Other named strategies (for example HeavensFamily Unique, Creocore Unique, or due / in-advance variants) appear when the tenant has them. Use those only when your institution chose them on purpose.

The cash-accounting walkthrough stays cumulative and horizontal, so it does not need the advanced strategy.

Grace and arrears

Optional grace on principal, interest payment, and interest charged — none of these can reach the full number of repayments. In-arrears tolerance, grace on arrears ageing, and overdue days for NPA follow. You can require the account to leave NPA only when arrears are cleared.

Multi-disburse

Turn this on for tranche loans. You must set a maximum tranche count. You can also set a maximum outstanding balance, disallow expected disbursements, and allow approved amounts over the applied amount (percentage or flat, with a number). Full term for tranche is only valid on a progressive multi-disburse product.

Guarantees

Hold guarantee funds requires a mandatory guarantee percentage. Own-funds and guarantor minimums cannot add up to more than that mandatory amount.

Down payment

Enable down payment, then set the percentage of the disbursed amount (1–100). You can auto-repay the down payment on disbursement. Product review and the loan overview both show the percent and that auto-repay flag.

Variable installments

Set a minimum gap and maximum gap (in days). The maximum must be greater than the minimum.

Other product flags

• Can define installment amount — officers may set an EMI.
• Can be used for top-up — this product may close an existing loan on disbursement. Only these products appear when a loan officer starts a top-up.
• Sync expected with disbursement date.

Interest recalculation

Enabling recalculation asks for compounding method, reschedule strategy, rest frequency (and a compounding frequency when compounding is not none), pre-closure interest, and whether arrears follow the original schedule. Progressive products that recalculate must use the progressive reschedule strategy. Compounding-on-EOD appears for daily compounding.

A floating-rate product on the terms step requires this toggle.

Delinquency

Installment-level delinquency requires a delinquency bucket. Create ranges and buckets under Organization → Delinquency buckets. The field is hidden until at least one bucket exists.

Income capitalization and buy-down

These apply only with the advanced payment strategy (typical for progressive schedules). Each toggle requires a calculation type, strategy, and income type. Buy-down can be marked as a merchant buy-down. Accrual accounting then needs the extra GL accounts on the accounting step.

Overrides

Choose which terms a loan officer may change when opening a loan on this product: amortization, interest type, payment strategy, interest calculation period, in-arrears tolerance, repay-every, grace on principal and interest, and grace on arrears ageing. Unchecked fields stay visible on the loan but locked.