We are excited to share Enhancements to Interest-Only Loans coming soon! Project #63501 will add new configurable options for interest-only loans, as well as corrections to certain behaviors for these loan types. This project is currently targeted for July 14th.
Additional details on this project are listed below. If you have any questions, please reach out to Lender*VP.
Please note the following:
- This project will not touch any historical data, this will only impact new data and new transactions going forward (on your existing portfolio and any new loans).
- For your interest-only loan portfolio to benefit from this project, we recommend having interest in first place in your payment matrix, both at the category and individual loan level. If you do not have interest in first place, you will see no change in how your interest-only loan portfolio performs today.
- Interested in having your matrix updated both at the loan and category levels? Please contact us at lendervp@cuanswers.com as we are offering matrix updates free of charge before the project goes in.
Optional principal curtailment flag configurations
Your credit union can configure this in Tool #458 Loan Category Configuration (available without matrix update)
- Today, when a member makes a payment on a non-delinquent interest-only loan, prior to the due date, with additional funds in the payment – those additional funds currently all go to principal.
- This project will be adding an optional configuration for your credit union to select whether you want those additional funds to continue to go to principal or have them follow the payment matrix.
- This is a per category change.
Optional end of day payment changes
Managed by CU*Answers, please contact us to update this on your behalf if you would like (available without matrix update)
- Today, all interest-only loan payment changes happen at beginning of day.
- This project will be giving your credit union the option to move payment changes to end of day instead of beginning of day, meaning on the day of the change, the member would still see the old payment amount all the way until the end of the day.
- This change would impact all of your interest-only loan categories.
Partial pay & due date determination calculations
(Only applicable with matrix update)
- This project will prevent partial payment calculation errors and correct due date determinations on interest-only loans with partial payments.
Delinquency calculations
(Will process correctly up until second payment calc date if matrix is updated; if not updated, delinquency calculations will remain as they are today on your portfolio)
- Delinquency calculations will be processed correctly as long as the loan has not hit the second payment calculation date while being delinquent.
- If the loan passes the second payment calculation date while delinquent, we recommend that your credit union manually monitor and adjust those loans as needed.
- To help catch delinquent interest-only loans that may have passed the second payment calculation date, we recommend to start monitoring these loan types at 30 days delinquent.
