NetLoan - Principal Adjustment Payment

Principal Adjustment Payment

Use Case: The Adjust Loan Terms modification can be used to add a payment that reflects a one-time adjustment toward the principal as of a specific date

Prerequisites: Loan modifications must be entered in NetLoan prior to running month-end amortization for the period of the new payment

STEP-BY-STEP PROCESS

  • Navigate to a loan record where the modification is to be recorded and click the Modify button


  • On the Loan Modification click the down arrow on the Modification Type field and select Adjust Loan Terms
    Option: Note you can adjust the loan term in this section if the early principal payment affects the remaining loan terms. To do so just input the new remaining periods in the Adjusted Remaining Loan Term field.

                 

  • Next, use the Principal Adjustment Payment payment type, select an effective date for the payment, the amount by which you would like to adjust the principal balance (a negative amount represents an increase in the loan balance and a positive amount represents a reduction in the loan balance), and if the payment is a one-time payment select One-Time in the payment frequency field, otherwise select one of the other frequency options that should apply.
    Option: Note that you can also add another payment change adjusting your regular payments going forward if these are affected due to the early principle payoff or drawdown. Just select the standard payment type, the effective date of the next regular payment, the new payment amount, and the regular payment frequency.
  • After double-checking inputs for the modification, click Modify Loan 
  • You will be navigated back to the loan record where you can click the refresh button until the button disappears and the schedule has been updated.
  • Note the additional schedule line for the principal payment on the effective modification date. Additionally, if you opted to change the remaining loan terms you will see the schedule now reflects those updated terms and if you changed the future regular payments these changes will be reflected from the effective date of that payment change onward.

 

  • The NetLoan Payment record(s) will be saved on the Payments subtab of the loan to save historical payment changes.

  •   If a modification was entered in error you can select the Reverse Modification button that is located at the top of the loan record. This will reverse the modification you just made. Check out our Modification Reversals article for more information. Note: If the amortization entries for that month have been run you will no longer have the option to reverse the modification.


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