# How to provide floating rates ### **Create loan account - Floating rate** To create a loan account application for a client To create a loan account application for a client, select the client by searching the desired client from [Global Search.](https://docs.mifos.org/mifosx/user-manual/for-all-users/untitled/global-search) Click the **General** tab. 1. On the Client page, Click **+New Loan** on the bright blue action bar. 2. Select the loan product to base the loan account on from the product list. 3. Complete the [loan account fields](https://docs.mifos.org/mifosx/user-manual/for-operational-users-mifos-x-web-app/accounts-and-transactions/loan-accounts/how-to-create-a-loan-account-application/loan-account-fields), making any modifications from the default that are permitted and applicable to the loan application. 4. Update required fields -\ **a) Interest rate differential -** Provide interest rate here. \ **b) Is Floating Rate -** Check the check box to enable floating interest rate. \ \- If unchecked, the disbursement interest rate will be applied and will remain same throughout the installment. \ Refer the example below: ![](https://mifosforge.jira.com/wiki/download/thumbnails/111673399/27.png?version=1\&modificationDate=1452750797348\&cacheVersion=1\&api=v2\&width=850) 5\. Click **Submit**. ### Viewing Loan Product - Applied Floating Rate Go to Loan account page >> Floating Interest Rates ![](https://mifosforge.jira.com/wiki/download/thumbnails/111673399/28.png?version=1\&modificationDate=1452751332801\&cacheVersion=1\&api=v2\&width=850) Please find below scenarios and configurations for understanding floating rates better:- ### **Scenario 1: With Base lending rate** a) Floating Rate definition (Admin>>Product>>Floating Rate) Base Lending Rate (Checked box) defined as shown in the image below ![](https://mifosforge.jira.com/wiki/download/thumbnails/111673399/19.png?version=1\&modificationDate=1452751529822\&cacheVersion=1\&api=v2\&width=700) b) Loan Product definition (Admin>>Product>>Loan Product) In the term section - Selected Floating rate is **Base lending rate** \- Differential Rate is **2% (Product level)** ![](https://mifosforge.jira.com/wiki/download/thumbnails/111673399/29.png?version=1\&modificationDate=1452751951424\&cacheVersion=1\&api=v2\&width=700) c) Loan Account definition (Client>>New Loan application) In term section - Interest Rate differential - 1% \- Is Floating Rate - Enabled (Checked box) ![](https://mifosforge.jira.com/wiki/download/thumbnails/111673399/30.png?version=1\&modificationDate=1452752376732\&cacheVersion=1\&api=v2\&width=700) d) In the loan account page >> Floating interest rates As you could see for the interest rate, i.e July 2,2015 - 13% = \[10(Base interest rate) +2(Loan product level) +1(Loan account level)] Aug 2,2015 - 14% = \[11(Base interest rate) +2(Loan product level) +1(Loan account level)] Sep 2,2015 - 15% = \[12(Base interest rate) +2(Loan product level) +1(Loan account level)] ![](https://mifosforge.jira.com/wiki/download/thumbnails/111673399/28.png?version=1\&modificationDate=1452751332801\&cacheVersion=1\&api=v2\&width=700) Note:- For this scenario **Is Floating Rate** is Enabled (Checked box) at the loan account level. ### **Scenario 2: Without "Is Floating rate enabled" - Loan account level** **Is Floating Rate** - **Disabled** (Unchecked box) then, if the loan was disbursed on July 5th, 2015 then interest rate would be without floating rate. Like shown below: July 2,2015 - 13% = \[10(Base interest rate) +2(Loan product level) +1(Loan account level)] Aug 2,2015 - 13% = \[10(Base interest rate) +2(Loan product level) +1(Loan account level)] Sep 2,2015 - 13% = \[10(Base interest rate) +2(Loan product level) +1(Loan account level)] ### **Scenario 3: With "Is differential enabled"** a) Floating Rate definition (Admin>>Product>>Floating Rate) \- Base Lending Rate (Must be **Unchecked boxed**), \- Is differential (Checked box) defined as shown in the image below ![](https://mifosforge.jira.com/wiki/download/thumbnails/111673399/20.png?version=1\&modificationDate=1452751530388\&cacheVersion=1\&api=v2\&width=786) b) Loan Product definition (Admin>>Product>>Loan Product) In the term section - Selected Floating rate is **Differential rate** \- Differential Rate is **2% (Product level)** c) Loan Account definition (Client>>New Loan application) In term section - Interest Rate differential - 1% \- Is Floating Rate - Enabled (Checked box) d) In the loan account page >> Floating interest rates As you could see for the interest rate, i.e July 2,2015 - 14% = \[10(Base interest rate) +1(Differential rate chart) +2(Loan product level) +1(Loan account level)] Aug 2,2015 - 15% = \[10(Base interest rate) +2(Differential rate chart) +2(Loan product level) +1(Loan account level)] ### **Scenario 4: Without - Base lending and Is differential** a) Floating Rate definition (Admin>>Product>>Floating Rate) \- Base Lending Rate (Unchecked boxed), \- Is differential (Unchecked box) defined as shown in the image below ![](https://mifosforge.jira.com/wiki/download/thumbnails/111673399/21.png?version=1\&modificationDate=1452751531043\&cacheVersion=1\&api=v2\&width=700) b) Loan Product definition (Admin>>Product>>Loan Product) In the term section - Selected Floating rate is **Absolute** \- Differential Rate is **2% (Product level)** c) Loan Account definition (Client>>New Loan application) In term section - Interest Rate differential - 1% \- Is Floating Rate - Enabled (Checked box) d) In the loan account page >> Floating interest rates As you could see for the interest rate i.e July 2,2015 - 13% = \[10(Base interest rate) +2(Loan product level) +1(Loan account level)] Aug 2,2015 - 14% = \[10(Base interest rate) +2(Loan product level) +1(Loan account level)] Related articles * Page:[Enabling Floating Rate](https://docs.mifos.org/mifosx/user-manual/for-administrators-mifos-x-platform/administration/products/loan-products/loan-product-fields/enabling-floating-rate) * Page:[Loan Products](https://docs.mifos.org/mifosx/user-manual/for-administrators-mifos-x-platform/administration/products/loan-products) * Page:[Loan with term vary based on loan cycle](https://docs.mifos.org/mifosx/user-manual/for-operational-users-mifos-x-web-app/accounts-and-transactions/loan-accounts/loan-with-term-vary-based-on-loan-cycle) * Page:[Tranche loan process](https://docs.mifos.org/mifosx/user-manual/for-operational-users-mifos-x-web-app/accounts-and-transactions/loan-accounts/tranche-loan-process) * Page:[How to create new loan - Interest Recalculation](https://docs.mifos.org/mifosx/user-manual/for-operational-users-mifos-x-web-app/accounts-and-transactions/loan-accounts/how-to-create-new-loan-interest-recalculation) --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. 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