Re: [Mifos-users] Apply "interest rate+spread" for late payment (Declining Balance - Interest Recalculation FS)

[Tejus D. <td...@th...>]

Hi Miguel,
There is an inherent penalization for late payment while using the new
declining balance interest recalculation int. type.

For eg.
1000 is the loan amount which was disbursed on 1 April. Consider this to be
a monthly loan (10 installments).


Assume that the Installment amount due on 1 May to be 110 (100 principal,
and 10 interest).

If the customer delays this payment by say 1 day, then 'Overdue interest; is
calculated on the principal due, in this case the overdue interest will be
calculated on the unpaid principal of 100, multiplied with daily rate of
interest, multiplied with the number of days outstanding.

In the earlier Declining Balance interest type, interest was not
recalculated if the customer paid late and this is the biggest difference
when compared with the new interest type.

Hope this helps.

Tejus





2011/3/28 Miguel Jóia Santos <mig...@sb...>

>
> Hi,
>
> I am currently testing the new feature for loans using Declining Balance -
> Interest Recalculation FS for MIFOS 2.1.
>
> It really works well. It can calculate daily interest on the outstanding
> debt.
> However for the Mozambican MFI’s we would prefer to use a feature of
> “interest rate + spread”, where the spread penalizes the customer for the
> late payment.
> Should we do not penalize the client for late payment he will continually
> make late payments.
>
> Please give me your thoughts if you agree with this comment!
>
> Thanks,
>
> Miguel Jóia Santos
> Consultor/Gerente
>
> SBS - Soluções em Banca e Seguros
> Insurance and Banking Solutions
> cell: +258 823000231
> cell: +258 847141055
>
>
>
>
>
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-- 

Regards,
Tejus Datta

+91 - 998 000 2879
Te...@th...
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