Enabling Floating Rate
Defining Loan product - Floating rate
Go to Admin>>Product>>Loan Product>> Create Loan products
Provide all the necessary fields for creating a Loan product, refer Loan Product Fields
Step I
Go to the Term section and update fields respectively :-
1 - Is Linked to Floating Interest Rates: Check the check box, to enable floating rates and to define.
2 - Select Floating rate chart: Select floating rate chart. You can select floating rate chart from here:- Floating Rate.
3 - Interest rate field: Provide interest rate. Note this provided interest will be added on to the selected rate chart.
4 - Is floating calculation allowed: Check the check box, to enable floating calculation. If this is unchecked, it will consider the flat rate i.e the disbursement date rate and it will remain same throughout the installments. For example please refer:- How to provide floating rates
5 - Minimum Floating interest rate allowed field: Provide minimum floating interest rate allowed.
6 - Default Floating interest rate allowed field: Provide default floating interest rate.
7 - Maximum Floating interest rate allowed field: Provide maximum floating rate allowed.
Then define other required fields like Principal, number of Installments and Repaid every.
Step II
Go to the Settings section and update mandatory fields respectively :-
8 - Interest Method - Must Be Declining balance in order to use floating interest rate.
9 - Calculate interest for exact days in partial period - Must be checked box in order to use floating rate.
Step III
Go to the Interest Recalculation section and update mandatory fields respectively :-
10 - Recalculate Interest - Must be enabled by checking the check box, in order to use Floating rate.
Then define other required fields for interest recalculations. Refer - Loan Products#InterestRecalculation
Step IV
Once you are done with updating all the necessary fields which are required for creating loan product, click on the Submit button.
Viewing of Loan Product - Floating rate
Go to Admin>>Product>>Loan Product>> List of created loan products is displayed >> Select required product to view as shown below.
Screen shot 1 - A defined example of a Loan product with Floating rate, without accounting enabled.
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