4.73.03 - Enhanced Late Fees Feature

22-01-2025

Introduction

Late fees are applied when payments are missed or overdue.

These fees are calculated on the next installment date and are automatically added 30 days after the due date.

A grace period applies only to the final manual settlement calculation, offering flexibility in managing overdue payments.

A cloud task runs daily at 12:00 AM to identify overdue loans and generate late fees automatically.

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Staging Late Fees in the Loan Ledger

The Late Settlement functionality now allows users to stage overdue loan late fees directly in the loan ledger before creating manual transaction receipts.

Confirmation of Late Settlement

1. Click the Late Settlement button to view existing and pending late costs.

2. Review the breakdown of staged fees.

3. Save changes to apply pending costs to the loan ledger.

Late Settlement Button: A new button in the loan ledger displays all late costs, divided into:

Select the Late Settlement Option

Existing Late Costs: Displays late fees that have already been applied to the loan, providing details such as overdue days, penalty fees, and VAT to ensure transparency.

Pending Late Costs: Highlights staged fees awaiting approval. These fees are fully itemized to include:

• Deferred Capital: The principal balances that remain overdue.

• Late Interest: Accrued charges on overdue amounts.

• Penalty Fees: One-time charges for late payments.

• Service Fees: Recurring charges for managing overdue accounts.

• VAT: Taxes applied to the total late costs.

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Enabling Late Fees in Loan Product Setup

To learn more about configuring late interest based on your predefined parameters, click the User Guide link below.

Late Costs | Mobiloan User Guide

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Additional Information on Late Fees

Cessation Triggers:

• Induplum Rule: Cease late fees when the total owed matches the original loan amount.

• Deceased, Handed Over, Written Off Statuses: Automatically halt charges based on specific loan statuses.

Grace Periods:

• Specify grace periods, such as a set number of days after the due date (e.g., 5 days).

• Define exempt amounts to prevent penalties during the grace period.

Best Practices:

• Utilize grace days to allow borrowers extra time to make payments before fees are applied.

• Streamline fee configurations by selecting only the loan components relevant to your product.

• Establish fair penalty amounts that encourage timely payments while avoiding excessive borrower burden.