AutoPal offers tools that allow you to alter the payment schedule of a loan without deactivating the loan, or posting a modification. Generally, this process is completed pre-activation on the loan, and payment schedules are not altered as the loan moves forward. But there may be exigent circumstances where you may want to make changes to either the payment amount or even the interest rate for a certain number of periods. It should be noted that utilizing this function may affect loan calculations and amortization.
These types of post-activation changes are made through the Roll Schedule Tool. This tool is generally used during pre-activation, but offers the same functionality on activated loans. For further information on this topic please review the following article: Loan Tools – Roll Schedule
To access the Roll Schedule tool on an activated loan, access the loan in question, and select the Initial Setup tab from the left-hand column. Once accessed, select the Edit / Tools icon in the upper right-hand corner.
Once you have accessed the Edit / Tools tab, scroll down to the “Options / Tools” section of the page, and select the Edit Schedule, once selected you will be greeted with the following page:
Once at this point you can begin using the roll schedule tool. Keep in mind that special considerations need to be taken due to the loan history already being recorded. For example, if you were to dramatically lower the payment amount on past scheduled payments, the application of existing payments would be altered, and may shorten the total number of forecast payments on the loan. In essence, as long as care is taken to ensure proper changes are made to the schedule, the Roll Schedule can be very useful on existing loans.
To apply a roll schedule to an account, begin by selecting the “New Schedule Line” icon, once selected you will be greeted with the following popup:
Simply enter the terms you would like to apply to the account. Multiple entries may be necessary to facilitate matching an existing payment schedule. For further information on the tool and potential uses, please review the following article: Loan Tools: Roll Schedule.
Due to the fact we are editing the schedule on an existing loan, it is important that we match the schedule for previously posted payments. For example, if the loan already has 6 months of posted payment history, and you are desiring the interest rate to decrease for the 7th payment forward, the first entry in the schedule roll would be: 6 Terms, the original interest rate, and the original payment amount. By doing this, we would ensure that the first 6 payments came due in the original amount, making it easy to make the necessary edits. From this point we can enter the rest of the schedule to close the loan. If the original loan had 12 periods, we can enter the following variables: Term 6, the new interest rate, and the new payment amount.
Please note that if your changes do not allow the loan to fully amortize, the system may add additional periods, or force a balloon payment. Additionally, if you were to enter more terms than it takes for the loan to amortize (i.e. entering 100 into the term field when numerically the loan closes in 12), the system will only extend the loan to what is numerically feasible.