NetLoan - Create a Revolving Credit Loan
Create a Revolving Credit Loan
Use Case: These steps can be followed as a starting point to create a new revolving credit loan.
Prerequisite: All setup & configuration activities need to be complete.
STEP BY STEP PROCESS
Creating the Loan Record
- In order to review an existing loan, you can navigate to the Loan Register (NetLoan > Loan Management > Loan Register) in the menu ribbon to search for or select an existing loan record.
- Otherwise, to create a new loan record, select NetLoan > Loan Management > New Loan
- A blank, new NetLoan Loan Form appears, from which you can create a new loan
- Manually update the Primary Information form section and fields as indicated below
Field Name | Required | Description | Example |
Loan ID | Auto-generated | A unique ID for the loan and the primary identifier within NetLoan for the loan record. | LN0037 |
Loan Name | Yes | Free-form input for NetLoan users. This can be used for the address or other identifying information for the loan. | 17 Cherry Tree Lane, London KY |
Loan Type | Yes | Assign the loan type from the drop-down list, which are defined as part of the NetLoan settings. | Real Estate |
| Lender | No | The lender for the loan. This is the lender to whom loan bills will be paid (if the loan is designated as a borrower loan) | McGeever Properties |
| Borrower | No | The borrower for the loan. This is the borrower to whom loan bills will be sent (if the loan is designated as a lender loan) | Atlas Canada |
Subsidiary | Yes | The subsidiary where the loan will reside. | Company, Inc. |
| Department | No | The department where the loan will reside. | Marketing |
| Class | No | The class where the loan will reside. | Service |
| Location | No | The location where the loan will reside. | US - West |
Currency | Yes | The contract currency for the loan, typically the currency in which payments will be made. | US Dollar |
| Schedule Calculation Type | Yes |
| Calculate Payment |
Loan Notes | No | A text area field to include any relevant notes or loan-related information. | Contact Linda for details |
- Also update the Schedule Information section and fields as indicated below
| Field Name | Required | Description | Example |
|---|---|---|---|
Status | Yes | Pending = schedules can be created, but journals cannot Commenced = the loan is ready for posting journal entries Fully Paid = the loan has been paid off in full | Commenced |
Origination Date | Yes | The date on which lender makes the funds available to the borrower. In the case of the revolving credit loan, this is the date of the first withdrawal. | 01-Jan-2019 |
Initial Payment Date | Yes | Input the date the first payment will be paid. Must be on or after the Origination Date. | 01-Jan-2019 |
| Maturity Date | Calculated | The anticipated ending date of the loan, which is calculated (origination date + loan term). In the case of the revolving credit loan, a maturity date or loan term must be entered but this can be changed via a modification as needed once the loan is commenced. | 31-Dec-2021 |
Loan Term | Yes | The anticipated duration (in whole months) of the loan. | 36 |
| Initial Loan Balance | Yes | Input the initial balance (withdrawal) of the loan before any down payment. | $400,000 |
Initial Monthly Payment | Yes | Input the first month payment for the loan. This field will assume a monthly payment of this amount going forward until a new payment is specified on the payment schedule. Can be $0. | $1,500.00 |
| Payment Day | Yes | The day of the month to book payments for the loan. | 31st |
| Business Day Convention | Yes | Affects which days loan payments post (and therefore affects interest calculations) when the expected payment day falls on a weekend or a holiday.
| Unadjusted |
| Day Count Convention | Yes |
| 30/360 |
| Annual Percentage Rate | Yes | Input the annual percentage rate on the loan. | 5% |
Loan Origination Fees for Capitalization | Yes | Input the net loan origination fees minus direct loan origination costs for the loan. | $8,000.00 |
Down Payment | Yes | Input the down payment on the loan. | $8,000.00 |
Balloon Payment | Yes | Input the balloon payment amount on the loan (to be paid in the final period), if it differs from the monthly payment. | $1,000.00 |
- Click Save to establish the loan and generate a Loan ID
- The completed loan record header details may appear as follows
- Run your journal entries - initial balance entry and any monthly entry as needed.
Modifying the Loan for Withdrawal or Repayment to the Loan Balance
Prerequisite: The Loan must be commenced and the journal entries run
- Navigate to the loan record for the revolving credit loan (NetLoan > Loan Management > Loan Register and select "View" next to the desired loan)
- Select the "Modify" button
- On the modification record, select a Modification Type of "Adjust Loan Terms" and on the payment schedule, add a line for the repayment or withdrawal by selecting a Payment Type of "Principal Adjustment Payment", entering the effective date (must be in a period that has not had journal entries run), entering the amount - a positive amount will be used for a principal repayment and a negative amount will be used for a withdrawal on the loan balance, and entering a payment frequency (generally will be "One-Time" unless the transaction is consistent over time)
- If applicable, add another payment line for the next know payment. If the withdrawal/repayment occurs on the same day as the regular monthly payment on the loan, net the amounts and enter as one line item with the "Principal Adjustment Payment" payment type. If the regular monthly payment occurs on any other day of the month or a different month, enter the payments on separate lines and use the "Standard" payment type (will apply the payment first to interest then to principal).
- Once the desired payments have been added and other modification inputs have been made, select the "Modify Loan" button
- Periodically hit the "Refresh" button until the Loan Schedule finishes processing to incorporate the modifications
- Once the loan schedule is refreshed, you will see the modifications reflected on the loan schedule