Automatic Late Fee Configuration

General


AutoPal software gives you the option to configure automatic late fees for your company. These fees are assessed automatically on your accounts once the grace period has expired. Because these fees are grace period dependent, it is vital you understand how to not only set the fees, but also to apply the grace periods.

How To: Set Defaults

Because the late fees are designed to be setup on an individual loan basis, AutoPal provides the option to assign default settings for the late fee configuration. These settings will apply to a loan upon creation, though you are free to edit them on an individual account basis if necessary.

To set the defaults for late fees, navigate to Settings > Defaults > System Defaults > Loan Specific Defaults > Select the Loan Type you wish to set the defaults for; [Automobile, Real Estate, Consumer, Other] > Edit > Late Fee Configuration

Late Fee Defaults 1

Once you have selected the Edit icon, you will be greeted with a page similar to the initial setup of a loan. Located at the bottom of the page is a section labeled “Late Fee Configuration”.

Late Fee Configuration

This section is broken into three primary categories, the Late Fee amount configuration, and drop down menus dedicated to the fee type, and percentage calculation if you elect to use those options for the configuration.

  • Late Fee – Here you can specify the amount of the late fee.  Options include:
    • Flat $30.00 fee
    • Custom dollar amount
    • Custom percentage of the percentage base
      • Note: The regular payment amount is a component in every late fee percent base option. Legally this component must be computed as the unpaid portion of the current payment. This means that if nothing has been paid in the current period, the total payment amount will be used. Otherwise it will be an amount smaller than the regular payment amount.
    • Greater of amount or percentage
    • Lesser of amount or percentage
  • Late Fee Percentage Base – This area lets you choose what number to base the late fee percentage on.  The percentage will always be based on the regular payment amount at a minimum.
  • Late Fee Type – This selection lets you specify one of three circumstances when late fees will be assessed.
    • Standard – A late fee will be assessed if the account is past due regardless of past-due amount.
    • Standard + Fee’s – A late fee will be assessed if the loan is past due in an amount greater than the late fee amount.
    • Current – If a payment has been made in the current period, no late fee will be assessed, otherwise a late fee will be assessed if the account is past due.
  • Note: 
    • Late fees are dependent on the grace period assigned to the individual account, and are assessed based on delinquency. For more information regarding “Grace Period” settings, please review the following article: Grace Period.

How To: Individual Account Settings

The default late fee settings may not suffice in every situation. AutoPal gives you the option to customize late fee settings on an individual account basis both during the creation phase of the account, and at any point post-activation.

If you need to customize the settings for a specific account, you can do so in Initial Setup > Late Fee Configuration:

Initial Setup - Late Fee

The options here are the same as they are when setting the defaults. If the loan has already been activated, it will be easier to make adjustments to the late fee settings in Loan Settings > Manage > Late Fees, as it allows you to avoid deactivating the loan.

Loan Settings - Late Fee

Once you have accessed the “Manage Loan Settings” section, you will find the “Late Fee Configuration” in the lower right portion of the page. Again, the settings are identical to those found inside the defaults, or the Initial Setup page, the formatting of the settings is slightly different, however.

Late Fee Configuration - Loan Settings

Once you have made the desired changes, select the “Save Changes” icon at the bottom of the page to finalize the Late Fee Configuration.

How To: Set Late Fee’s By Status:

It may be that you only want accounts in certain statuses to have late fees assessed on them.  AutoPal lets you select whether late fees will be applied dependent on the sub-status of the loan.  To do this, navigate to Settings > Loan Management > Charges. Located at the bottom of the charges page you will see the following selection options:

Late Fees by Status

You will notice that the options are divided by section based on the Loan Status, and further broken down by sub-status. To the right of each sub status is an on/off toggle switch, by setting the switch to “On” the loans with that status will now qualify for late fees based on grace period expiration. If set to “No”, regardless of whether the grace period of the loan has expired, the account cannot qualify for automated late fees. Please pay special attention to the the “Late Fee Application” option in the upper right-hand corner. This section allows you to determine whether the automated late fees will be applied as “Standard” or “Payoff Only”.

  • Standard – Late fees come due as soon as they are posted to the account. A Standard Fee will add to the accounts “Amount Past Due” balance. A major benefit of having this add to the past due balance is the fact that the customer is aware that there was a fee added to the account and they need to pay that fee to come current.
  • Payoff Only – Late fees are only due with the loan payoff. A “Payoff Only Fee” will not add to the accounts “Amount Past Due” balance, but will instead only increase the loan’s payoff amount. One thing to note when making a payoff fee is that AutoPal does not natively provide a payment waterfall application that will apply payments towards payoff only fees. To apply payments to payoff only fees, choose “Fees Only” as the “Type of Payment” when logging a payment. Once “Fees Only” is selected, another box will pop up which allows you to apply the payment to just payoff only fees or both payoff only and standard fees.

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