A number of out of the box appraches exist, some are custom to specific MFIs, some are more general and indicate the order in which payments are processed.
+ +Refer to the Payment Application Logic / Transaction Processing Strategy section in the appendix for more detailed overview of each available payment application logic provided out of the box.
+ +List of current approaches:A number of out of the box appraches exist, some are custom to specific MFIs, some are more general and indicate the order in which payments are processed.
+ +Refer to the Payment Application Logic / Transaction Processing Strategy section in the appendix for more detailed overview of each available payment application logic provided out of the box.
+ +List of current approaches:The way payments (transactions) are handled and the effect they have on the loan is an area that can differ widely from MFI to MFI. Mifos allows for transaction processing strategies to be developed that are associated with a loan product. Several approaches are provided out-of-the-box. If these approaches dont meet exactly your needs a custom approach can be developed and released with the platform.
+ +In general the the following areas are handled by any given transaction processing strategy: +
Replicates the same payment order of our previous legacy mifos software.
++ Payment order: +
Early payment: Any payment that pays off an installment that occurs before the due date of the installment. There is no incentive/advantage to making an early payment as theres no decrease in cost of the loan.
+ +On time payment: Any payment that pays off an installment that occurs exactly on the due date of the installment.
+ +Late payment: Any payment that pays off an installment that occurs after the due date of the installment. There is no penalization for late payment. The total cost of the loan does not automatically increase, no penalties are automatically applied to the loan.
+ +The key aspect of this strategy is the payment order.
++ Payment order: +
Early payment: Any payment that pays off an installment that occurs before the due date of the installment. There is no incentive/advantage to making an early payment as theres no decrease in cost of the loan.
+ +On time payment: Any payment that pays off an installment that occurs exactly on the due date of the installment.
+ +Late payment: Any payment that pays off an installment that occurs after the due date of the installment. There is no penalization for late payment. The total cost of the loan does not automatically increase, no penalties are automatically applied to the loan.
+ +The key aspect of this strategy is the payment order.
++ Payment order: +
Early payment: Any payment that pays off an installment that occurs before the due date of the installment. There is no incentive/advantage to making an early payment as theres no decrease in cost of the loan.
+ +On time payment: Any payment that pays off an installment that occurs exactly on the due date of the installment.
+ +Late payment: Any payment that pays off an installment that occurs after the due date of the installment. There is no penalization for late payment. The total cost of the loan does not automatically increase, no penalties are automatically applied to the loan.
+ +Per RBI regulations, all interest must be paid (both current and overdue) before principal is paid.
+For example taking a loan with two installments due (one current and one overdue) of 220 each (200 principal + 20 interest) - A partial payment of 40 results in payment been broken up as 20 interest on installment #1 (200 principal remaining) and 20 payment to interest on installment #2 (200 principal remaining)
++ Payment order: +
Early payment: Any payment that pays off an installment that occurs before the due date of the installment. There is no incentive/advantage to making an early payment as theres no decrease in cost of the loan.
+ +On time payment: Any payment that pays off an installment that occurs exactly on the due date of the installment.
+ +Late payment: Any payment that pays off an installment that occurs after the due date of the installment. There is no penalization for late payment. The total cost of the loan does not automatically increase, no penalties are automatically applied to the loan.
+