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Posted to user@fineract.apache.org by Ed Cable <ed...@mifos.org> on 2016/11/22 16:51:01 UTC
What is the purpose of the loan term vs number of repayments?
Hi community,
Could somebody explain to me why we have an input field for loan term in
addition to number of repayments.
It always just seemed like an extraneous field that one manually had
compute in one's head based on the number of repayments multiplied by the
repayment frequency.
Why I think it should be removed:
1) It's confusing to the user and extraneous
2) It also appears that it really has no bearing on the actual term of the
loan as the only validation for term is that loan term frequency must match
that of repayment frequency. However if you submit a loan account with a
term of 24 months and 12 monthly repayments, the repayment schedule
rightfully has 12 monthly installments.
3) Term is nowhere to be found in the loan product configuration, just the
configuration of number of repayments.
Am I missing some use case whereby a loan has a term or maturity date
that's longer than the number of installments
If so, shouldn't we then only make this configurable when so desired since
it's an edge case.
--
*Ed Cable*
Director of Community Programs, Mifos Initiative
edcable@mifos.org | Skype: edcable | Mobile: +1.484.477.8649
*Collectively Creating a World of 3 Billion Maries | *http://mifos.org
<http://facebook.com/mifos> <http://www.twitter.com/mifos>
RE: What is the purpose of the loan term vs number of repayments?
Posted by Adi Raju <ad...@confluxtechnologies.com>.
Hi,
I can’t see any technical significance from the code either.
Regards,
Adi
Principal Architect, <http://www.confluxtechnologies.com/> Conflux Technologies Pvt Ltd
Address: #304, 2nd Floor, 7th Main Road, HRBR Layout 1st Block, Bengaluru, Karnataka, 560043 INDIA
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Finflux
From: Subramanya M K [mailto:subbus73@gmail.com]
Sent: 23 November 2016 12:10
To: user@fineract.incubator.apache.org; edcable@mifos.org
Subject: Re: What is the purpose of the loan term vs number of repayments?
Hi Ed,
My view points / assumptions to have this loan term input fields is as follows;
1. The repayment start dates may vary depending on the product or at the option of the borrower. So, if this field is not an input field, the last installment may fall either beyond the actual loan end / maturity date (from the date of disbursement) or earlier to the actual loan end / maturity date. Because of which the loan contract might have some legal implications.
2. In case of Moratorium period / repayment holiday type of loans the calculation of the loan term may be wrong. (For example: consider a home loan where the borrower has requested for 5 years loan with an initial repayment holiday of 6 months. In this case actual number of installments will be 54 & not 60. So, there could be a possibility to consider the loan term as 4 & a half years (54 months) instead of 5 years.)
3. If there is a restructuring of the loan repayments due to part early payment or delayed payment, the installment term may vary leading to change in the actual end date of the loan.
Thanks and Regards,
M.K.Subramanya
SAMVITS, India.
On Tue, Nov 22, 2016 at 10:21 PM, Ed Cable <ed...@mifos.org> wrote:
Hi community,
Could somebody explain to me why we have an input field for loan term in addition to number of repayments.
It always just seemed like an extraneous field that one manually had compute in one's head based on the number of repayments multiplied by the repayment frequency.
Why I think it should be removed:
1) It's confusing to the user and extraneous
2) It also appears that it really has no bearing on the actual term of the loan as the only validation for term is that loan term frequency must match that of repayment frequency. However if you submit a loan account with a term of 24 months and 12 monthly repayments, the repayment schedule rightfully has 12 monthly installments.
3) Term is nowhere to be found in the loan product configuration, just the configuration of number of repayments.
Am I missing some use case whereby a loan has a term or maturity date that's longer than the number of installments
If so, shouldn't we then only make this configurable when so desired since it's an edge case.
--
Ed Cable
Director of Community Programs, Mifos Initiative
edcable@mifos.org | Skype: edcable | Mobile: +1.484.477.8649
Collectively Creating a World of 3 Billion Maries | http://mifos.org <http://facebook.com/mifos> <http://www.twitter.com/mifos>
Re: What is the purpose of the loan term vs number of repayments?
Posted by Subramanya M K <su...@gmail.com>.
Hi Ed,
My view points / assumptions to have this loan term input fields is as
follows;
1. The repayment start dates may vary depending on the product or at the
option of the borrower. So, if this field is not an input field, the last
installment may fall either beyond the actual loan end / maturity date
(from the date of disbursement) or earlier to the actual loan end /
maturity date. Because of which the loan contract might have some legal
implications.
2. In case of Moratorium period / repayment holiday type of loans the
calculation of the loan term may be wrong. (For example: consider a home
loan where the borrower has requested for 5 years loan with an initial
repayment holiday of 6 months. In this case actual number of installments
will be 54 & not 60. So, there could be a possibility to consider the loan
term as 4 & a half years (54 months) instead of 5 years.)
3. If there is a restructuring of the loan repayments due to part early
payment or delayed payment, the installment term may vary leading to change
in the actual end date of the loan.
Thanks and Regards,
M.K.Subramanya
SAMVITS, India.
On Tue, Nov 22, 2016 at 10:21 PM, Ed Cable <ed...@mifos.org> wrote:
> Hi community,
>
> Could somebody explain to me why we have an input field for loan term in
> addition to number of repayments.
>
> It always just seemed like an extraneous field that one manually had
> compute in one's head based on the number of repayments multiplied by the
> repayment frequency.
>
> Why I think it should be removed:
>
> 1) It's confusing to the user and extraneous
> 2) It also appears that it really has no bearing on the actual term of the
> loan as the only validation for term is that loan term frequency must match
> that of repayment frequency. However if you submit a loan account with a
> term of 24 months and 12 monthly repayments, the repayment schedule
> rightfully has 12 monthly installments.
> 3) Term is nowhere to be found in the loan product configuration, just the
> configuration of number of repayments.
>
> Am I missing some use case whereby a loan has a term or maturity date
> that's longer than the number of installments
>
> If so, shouldn't we then only make this configurable when so desired since
> it's an edge case.
>
>
> --
> *Ed Cable*
> Director of Community Programs, Mifos Initiative
> edcable@mifos.org | Skype: edcable | Mobile: +1.484.477.8649
>
> *Collectively Creating a World of 3 Billion Maries | *http://mifos.org
> <http://facebook.com/mifos> <http://www.twitter.com/mifos>
>
>
Re: What is the purpose of the loan term vs number of repayments?
Posted by Dayna Harp <dh...@mifos.org>.
I agree that manually entering the number of repayments leads to confusion. Loan term is the key number of use as most FI’s loan policies speak to maximum allowable loan term and amount.
If a client has a loan for a period of 2 years or 24 months
If they select monthly repayment, the repayment should automatically calculate to 24.
If they select bi-weekly payments, the system should automatically calculate 52.
If they select weekly repayment, the system should automatically calculate 104.
On Nov 22, 2016, at 10:51 AM, Ed Cable <ed...@mifos.org> wrote:
Hi community,
Could somebody explain to me why we have an input field for loan term in addition to number of repayments.
It always just seemed like an extraneous field that one manually had compute in one's head based on the number of repayments multiplied by the repayment frequency.
Why I think it should be removed:
1) It's confusing to the user and extraneous
2) It also appears that it really has no bearing on the actual term of the loan as the only validation for term is that loan term frequency must match that of repayment frequency. However if you submit a loan account with a term of 24 months and 12 monthly repayments, the repayment schedule rightfully has 12 monthly installments.
3) Term is nowhere to be found in the loan product configuration, just the configuration of number of repayments.
Am I missing some use case whereby a loan has a term or maturity date that's longer than the number of installments
If so, shouldn't we then only make this configurable when so desired since it's an edge case.
--
Ed Cable
Director of Community Programs, Mifos Initiative
edcable@mifos.org <ma...@mifos.org> | Skype: edcable | Mobile: +1.484.477.8649
Collectively Creating a World of 3 Billion Maries | http://mifos.org <http://mifos.org/> <http://facebook.com/mifos> <http://www.twitter.com/mifos>
Dayna Harp
Director Global Credit Union Inclusion, The Mifos Initiative
dharp@mifos.org <ma...@mifos.org> | Skype: harpcreek | Mobile: +501 628.9686
Ending Poverty One Line of Code at a Time | http://mifos.org <http://mifos.org/> <http://facebook.com/mifos>
<http://facebook.com/mifos>
<http://www.twitter.com/mifos>