Loan Type is a structure to which Loan Products are associated. A Loan Type provides the mandatory characteristics to set boundaries while defining Loan Products. Loan Type defines accounting, reserving funds, critical calculations, ability to convert construction loan to permanent loans and requirement for collateral. Setting these parameters ensures all associated Loan Products adhere to same default settings as set up in the selected loan type. Before creating a new loan type, you can search for existing loan types that match your criteria and duplicate the loan type.

Creating a Loan Type

1. Enter the General Information for the loan type and select from Direct or ERS loan class.

• Direct Loan is a disbursement of funds under a contract that requires repayment of such funds with or without interest.
• Extended Repayment Schedule or ERS Loan is a loan converted from one or more receivables and assigned terms and conditions for repayment.

2. Based on the Class selected, the parameters in the Details section vary. If you selected Direct Loan, all parameters will be available. In case of ERS, the following parameters are not used:
• Allow Multiple Disbursements
Note: Setting Multiple Disbursement to Yes will allow funds to be disbursed in more than one payment to the borrower.
• Allow Permanent Conversion
Note: Setting Permanent Conversion to Yes will convert the loan to a permanent or term loan after the final disbursement.
Note: The option to Allow Permanent Conversion is only available when you set up a loan type for direct loans that have multiple disbursements.
• Credit Review
Note: This option allows you to configure the requirement to review credit status of the borrowers.

3. Select Payment Application and assign order in the Terms of Payment section. You can add new or remove existing payment applications.

You can only create loan products for loan types with a status of Completed. If any required fields for a loan type are not filled in, then the status is Incomplete.

You can only delete a loan type if it is Incomplete or if it is Completed without any loan products assigned to it. Loan types with loan products assigned to it can only be end-dated and made unavailable.

Updating a Loan Type
If you are updating a Loan Type, the Class, Type, Description and Start Date will appear as read-only fields and cannot be edited. You can end-date existing Loan Types which will ensure your Loan Type is not assigned to new Loan Products.

Duplicating a Loan Type
You can create loan types that are similar to existing types. Search for the Loan Type you wish to duplicate and click Duplicate. Replace the "Copy of <Loan Type Name>" with a new name (if necessary). Enter a Description and Start Date. The Class defaults from the original Loan Type and cannot be changed. Mark it Completed to make it
available for assignment to Loan Products.
Note: If you change the values of a Loan Type after marking it Completed, the new values will not affect existing loan products assigned to the loan type.