Late Costs
Last updated
Last updated
Once-off penalty fee: A fixed fee charged for late payments. Check this box to enable the penalty fee.
Interest: Apply interest charges on overdue amounts. Enable this if you want interest to accrue on overdue balances.
Service fee: A recurring fee associated with managing overdue accounts.
For a late payment, you can charge a one-time penalty fee alongside monthly interest and service fees.
This section determines which components of the loan will have late interest applied:
Capital: Charge late interest on the principal amount.
Initiation: Include the initiation fee in late interest calculations.
Service: Apply late interest on service-related fees.
Interest: Charge interest on overdue interest amounts.
Discount: Include discounts in late interest.
Credit life: Apply late interest on credit life insurance costs.
VAT: Include VAT in late interest charges.
Only select the components that are relevant to your loan product. For example, excluding VAT and discounts simplifies calculations.
Defines when late settlement costs will stop accumulating. Options include:
Induplum: Cease charging costs when the total amount owed equals the original loan amount.
Deceased: Stop late settlement costs if the borrower is deceased.
Handed Over: Halt charges when the loan is handed over to a collections agency.
Written Off: End charges when the loan is written off.
Ensure that your policies align with these cessation triggers to prevent unnecessary charges.
Late Settlement Grace Days: Specifies the grace period before late settlement costs begin. Enter the number of days after the installment due date (e.g., "5 days after installment due").
Late Settlement Grace Amount: Defines the maximum amount that will be exempt from late settlement fees during the grace period.
Use grace days to provide borrowers with additional time to make payments before penalties apply.
Once-off Penalty Fee Amount: Enter the fixed penalty fee charged for late payments (e.g., "50").
Set a reasonable penalty amount to encourage timely payments without burdening borrowers excessively.
If you want to:
Charge a one-time penalty fee.
Apply late interest to the capital and service components only.
Stop charging costs when the loan reaches induplum.
Allow a 5-day grace period before late settlement costs apply.
Configure the settings as follows:
Enable "Once-off penalty fee," "Capital," and "Service."
Select "Induplum" as the cessation trigger.
Set "5 days after installment due" as the grace period.
Enter "50" as the penalty fee amount.
By carefully configuring these settings, you can ensure that late payments are managed fairly and efficiently while adhering to your organization’s policies.
