Loan Ratio Configuration

Lending Lending Loan Ratio Configuration

This document provides comprehensive instructions for configuring custom loan ratios within the FLEX Loan Processing system. Customizable ratios enable credit unions to define and utilize ratios tailored to their specific needs, complementing the standard ratios available during loan application processing.

Accessing Loan Ratio Configuration

The Loan Ratio Configuration module is located under System Administration in the FLEX Main Menu.

  1. Navigate to System Administration.
  2. Expand the General Configuration section.
  3. Expand the Configuration subsection.
  4. Select Loan Ratio Configuration.
    (Refer to Image 1 in the original documentation for visual guidance.)

Overview of Configuration Tabs

The Loan Ratio Configuration interface comprises three primary tabs, each serving a distinct purpose in the creation of custom ratios:

  • Obligation Totals Tab: Used to define variables that represent various financial totals (e.g., secured loans, monthly rent) for use within formulas. Obligation Totals must be created before formulas can be defined.
  • Formulas Tab: Used to construct mathematical formulas by combining defined Obligation Totals and other system variables with operators (e.g., division, multiplication). Formulas must be created before ratios can be defined.
  • Ratios Tab: Used to assemble the final custom ratios by selecting a defined numerator formula and a defined denominator formula. This tab also allows for the assignment of applicable loan types, purpose codes, and security codes to the ratio.

Configuring Obligation Totals

Obligation Totals allow the credit union to create reusable variables that represent specific financial amounts (e.g., total secured loans, total monthly rent) to be incorporated into formulas.

Steps to Create an Obligation Total

  1. Click the Obligation Totals tab.
  2. Click the Add button.
  3. In the “Name” field, enter a descriptive name for the obligation total (e.g., “Secured Loans”).
  4. Under “Included Amount,” select one of the following options to specify what the obligation total will include:
    • Loan Amount
    • Monthly Payment
    • Annual Payment
  5. Under “Secured Status,” indicate the type of obligations to include:
    • Secured
    • Unsecured
    • Both
  6. In the “Available Codes” list, select the relevant credit union codes that should be included in this obligation total.
  7. Click the right arrow button to move the selected codes to the “Selected” table.
  8. Click Save.
    Once an Obligation Total is created, it will be available for selection in the “Formulas” tab.

Configuring Formulas

Formulas define the mathematical expressions that will form the numerator or denominator of your custom ratios.

Steps to Create a Formula

  1. Click the Formulas tab.
  2. Click the Add button.
  3. In the “Name” field, enter a descriptive name for the formula (e.g., “Monthly Income / Secured Loans”).
  4. From the first drop-down list, select the initial variable for your formula (e.g., “Monthly Income”). This can be a system-defined variable or an Obligation Total you previously created.
  5. From the small drop-down list next to the first variable, select the desired mathematical operator (e.g., “/”, “*”, “+”, “-“).
  6. From the second drop-down list, select the second variable for your formula (e.g., “Secured Loans”).
  7. Repeat steps 5 and 6 if your formula requires additional variables and operators (up to four variables are supported).
  8. Click Save.
    A formula must be created for every numerator and denominator that will be used in a ratio.

Configuring Ratios

Ratios combine the defined formulas to create the final custom loan ratios that will appear in the Loan Application.

Steps to Create a Ratio

  1. Click the Ratios tab.
  2. Click the Add button.
  3. In the “Name” field, enter a descriptive name for the ratio (e.g., “Secured Ratio”).
  4. From the “Numerator” drop-down list, select the formula that will serve as the numerator for this ratio.
  5. From the “Denominator” drop-down list, select the formula that will serve as the denominator for this ratio.
  6. (Optional) Check the Show in Header checkbox if you want this ratio’s value to be displayed in the header section of the Loan Application Details.
  7. Loan Types:
    • Click the Maintain button next to “Loan Types.”
    • Select the specific loan types for which this ratio will be available.
    • Click Save (or equivalent button in the pop-up).
  8. Purpose Codes (Optional):
    • Click the Maintain button next to “Purpose Codes.”
    • Select any specific loan purpose codes for which this ratio will apply.
    • Click Save (or equivalent button in the pop-up).
  9. Security Codes (Optional):
    • Click the Maintain button next to “Security Codes.”
    • Select any specific loan security codes for which this ratio will apply.
    • Click Save (or equivalent button in the pop-up).
  10. Click Save on the main Ratio Configuration screen.

Viewing Configured Ratios in Loan Application

Once a customized ratio has been successfully configured and assigned to a specific loan type, the Ratios tab will become available within the Loan Application details. This tab will display the calculated values for all customized ratios applicable to the current loan.

(Refer to Image 8 in the original documentation for an example of the Ratios tab in Loan Application Details.)