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Reduced Payment Deviations for Equal Installment Loans

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This method is currently available for Dynamic Term loans with the Declining Balance Equal Installments interest calculation method, and no taxes.

Loans with large differences in the number of days between payments have equal installments due, but the last installment is usually adjusted with the difference that comes from the irregular payment intervals.

Optimized Payments​

The functionality is available by selecting Optimized Payments as a payment method in the Repayments Schedule section, when setting up a new loan product.

With Optimized Payments, you can redistribute the irregular installments surplus of interest over the remaining installments. To accomplish this, the schedule is created in three steps:

  1. The standard schedule is calculated.
  2. The difference between the installments is redistributed on the remaining installments.
  3. The deviation per installment using the standard interpolation method is reduced.

Example​

The following is an example with a comparison between the Standard Payments and the Optimized Payments methods. comparison between the Standard Payments and the Optimized Payments methods

The optimized payments steps are applied when creating or activating an account and when editing the schedule due dates or number of installments.