Loan Interest Rebate

Lending Lending Loan Interest Rebate

This document provides technical guidance for utilizing the Loan Interest Rebate functionality within the FLEX system.

1. Overview

The Loan Interest Rebate feature allows financial institutions to process and post interest rebates to member loan or share accounts based on defined criteria. It is crucial to run a worksheet first to verify calculations before posting any rebates.

2. Accessing Loan Interest Rebate

The Loan Interest Rebate function is located within the FLEX Main Menu:

  • Loans
    • Loan Interest Rebate

3. Configuration Options

The Loan Interest Rebate screen is divided into three main sections: Include Options, Post Options, and Print Options. All fields in the Post Options section must be filled for proper calculations.

3.1. Include Options

These options define which loans are eligible for the interest rebate.

  • Loan Maintenance Rebate Flag:
    • Y: Only loans with the “Interest Rebate Eligible” flag checked in Loan Maintenance (Tab 2 – Other Information) will be included.
    • N: All open loan suffixes will be included in the rebate, regardless of the flag.
  • Loan Type 1-5:
    • Leave blank to include all loan types.
    • Enter specific loan types to filter eligible loans.
  • Allowable Minimum Loan Balance:
    • Enter the minimum required loan balance for inclusion.
    • Leave blank to include suffixes with a zero balance. If a loan has a zero balance, the rebate will be posted to the member’s share suffix.
  • Allowable Days Delinquent:
    • Enter the maximum number of days a loan can be delinquent to be included.
  • Allowable Times Delinquent (30, 60, 90, 120 Days):
    • Enter the maximum number of times a loan could have been delinquent for 30, 60, 90, or 120 days.
    • Important Note: If these fields are left blank, only loans with no delinquency within the interest rebate period will be included.
    • Recommendation: FLEX suggests running a Loan File Export Report to assess member delinquency statuses. The export should include:
      • Is Closed Loan
      • Is Closed Account
      • Times30Days Delinquent
      • Times60Days Delinquent
      • Times90Days Delinquent
      • Times120Days Delinquent
  • Minimum Interest Amount:
    • Enter a minimum interest amount for a loan to be considered for a rebate.

3.2. Post Options

These options control how the interest rebate is calculated and posted.

  • Which Interest Year?
    • Y: Uses the current year-to-date interest for calculations.
    • L: Uses the interest paid in the last year for calculations.
  • Update Year to Date Amount?
    • Indicate ‘Y’ to update the Year-to-Date (YTD) amount.
  • % to Rebate:
    • Enter the percentage that will be applied to determine the interest rebate amount.
  • Post Rebate to Loan Suffix?
    • Y: The rebate will be posted back to the loan suffix.
    • N: The program will post the interest rebate to the member’s share suffix.
  • Post to Interest Due?
    • Y: The program will first post the rebate to the current amount of interest due on the loan.
      • If the rebate amount is greater than the interest due, the remainder will be posted to the loan balance.
      • If the remainder is less than the loan balance, the program will post the remaining amount to the member’s share suffix specified in the ‘Post to Share Suffix’ field.
  • Post to Share Suffix:
    • This field is always required, even if ‘Post Rebate to Loan Suffix?’ is set to ‘Y’.
    • Enter the share suffix where the program can post either the full interest rebate or the remainder of the rebate (if applicable).
  • Post this Rebate:
    • Initial Run (Recommended): Always run with ‘N’ first. This generates a worksheet for review, allowing you to identify potential posting issues or missing members. Review the loan suffixes against the ‘Included Options’ parameters if members are missing.
    • Final Posting: Once the worksheet is reviewed and all looks correct, change this to ‘Y’ to post the interest rebate.

3.3. Print Options

These options control the output of the rebate report.

  • Print Totals?
    • Y: Displays the totals of each column on the report.
  • Print Detail Report?
    • N: The report will only list items that could not be posted to member accounts (e.g., closed share suffixes).
    • Y: (Implied, as ‘N’ is the default for limited output) Provides a detailed report.
  • Sort by Account or Suffix?
    • A: Sorts by account number.
    • S: Sorts by suffix for each account. (The report will still sort by account order overall).

4. Report Archiving

Generated reports are archived under:

  • DOCMAN LN3600P
  • INTREBAT

5. Workflow and Examples

5.1. Interest Rebate Worksheet

  • Always run worksheets first before proceeding with any posting. This allows for verification of calculations and identification of any discrepancies.

5.2. Interest Rebate Posting

  • Only post after running and reviewing the worksheets.

5.3. No Results Report

  • If no accounts are found based on the specified criteria, the report will indicate “No Results.”