If you are doing title loans, it is important that you specify the default (most common) payment method by checking the default check box of the appropriate title loan payment method. All payment methods that can be used should be checked as active. All payment methods that are not used should have both the default and active boxes unchecked. If you have a default number of terms (the scheduled number of payments), you can enter the default. If the number of terms varies from loan to loan, it is best to leave the default terms blank and specify the number of terms at the time the loan is entered. The most common payment methods are:
Default: Any non-amortized, non-balloon loan. This is the most common payment method. The Company Setup for Title Loans solely determines how interest is calculated and accrued.
SI-C*-DOM: An amortized loan with pre-calculated interest and a "day of month" payoff calculation. The asterisk is replaced by letters denoting the payment frequency: M=monthly, BM=bimonthly (twice per month), BW=biweekly (every two weeks). The interest is calculated and applied per the precalculated amortization schedule and the interest does not vary from the amortization schedule until the loan is paid off in full. When the loan is paid off, there are two payoff methods. The first method writes off all unearned interest for the current month, and all future interest, but does not discount any interest for prior periods. The second payoff method is a true daily interest payoff. The program recalculates the interest from "day one" up to the payoff date and adjusts the payoff amount accordingly.
Default-* (Company Setup/Daily Accrual Method): An amortized loan with a true daily periodic interest accrual, per the Company Setup for Title Loans. The asterisk is replaced by letters denoting the payment frequency: M=monthly, BM=bimonthly (twice per month), BW=biweekly (every two weeks), W=Weekly. It is important that the Company Setup be correct, and will normally be an Accrual Method of Daily, with the interest setup having the Initial check box unchecked and the Recurring checkbox checked. With this type of loan there is no payoff calculation, since interest is calculated and applied on a daily basis.
Default-* (Actuarial Method): An amortized loan with a true daily periodic interest accrual, per the Company Setup for Title Loans. The asterisk is replaced by letters denoting the payment frequency: MA=monthly/actuarial, 15=bimonthly (twice per month), 14=biweekly (every two weeks), 7=Weekly. It is important that the Company Setup be correct, and will normally be an Accrual Method of Daily, with the interest setup having the Initial check boxunchecked and the Recurring check box checked. With this type of loan there is no payoff calculation, since interest is calculated and applied on a daily basis. This method varies from the other Default methods in that the user can "synch" up the first payment to a client's next paydate, and the computer will refigure the contract APR to account for the fact that the first period is different in length to all subsequent periods. With this method, it is up to the user to tell the program the first payment due date by changing it on the loan screen before clicking the SAVE+PRINT button.
Balloon-*: A balloon loan with a predetermined number of payments. The asterisk is replaced by letters denoting the payment frequency: M=monthly, SM=semimonthly (twice per month), BW=biweekly (every two weeks), W=Weekly. It is important that the Company Setup be correct, and will normally be an Accrual Method of Daily or Loan Length, with the interest setup having the Initial checkbox either unchecked (for daily interest) or checked (for loan length accruals), and the Recurring ccheckbox checked (unless manual renewals are done at the time the client pays). With this type of loan there is no payoff calculation if the interest is considered a flat fee for the period, or one of the two provided payoff methods can be used.
SI-10Pay: This method is used only for Mississippi, for a 10 payment loan with a minimum 10% principal reduction required on each payment. If the client does not pay the full 10% principal reduction, the principal is still owed to the lender, but the interest for the next period is reduced by a minimum of the state-mandated 10%.
box unchecked