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From "Adi Raju" <adi.r...@confluxtechnologies.com>
Subject RE: Issues in interest recalculation
Date Mon, 26 Dec 2016 10:41:47 GMT
Hi Sander,

Regarding interest calculation in excel: I need all the loan product parameters to be able
to derive the proper interest. Can you reproduce it on demo server and give me loan id?
Regarding loaned 333: Issue is self-explanatory, since no repayments transactions are there,
the interest component is going beyond EMI. This is the behavior from the origin. I think
we need to define the behavior for such instances, as we cannot have schedule with interest
overshooting the EMI, and also this is a hindrance to back dated loan creation with interest
recalculation. 

Generally, interest calculations depend on the current day, daily/same as repayment interest
calculation, compounding components, compounding day and REST. You might not be getting the
exact amount, as you might be missing or overlooking on one of these parameters.

Regards,
Adi Raju

Principal Architect, Conflux Technologies Pvt Ltd
Address: #304, 2nd Floor, 7th Main Road, HRBR Layout 1st Block, Bengaluru, Karnataka, 560043
INDIA


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-----Original Message-----
From: Sander van der Heyden [mailto:sandervanderheyden@musonisystem.com] 
Sent: Friday, December 23, 2016 7:45 PM
To: dev@fineract.incubator.apache.org
Cc: A good place to start for users or folks new to Mifos.
Subject: Re: Issues in interest recalculation

Hi Adi,

We are wondering whether you had a chance to look at the interest calculation excel? We are
still unable to reconcile amounts for subsequent instalments.

In addition we've also started seeing more problems with loans that are prepaid significantly
early on in the schedule, unfortunately I cannot test this on the demo as the ability to create
new loans seems to be broken right now.

Thanks,
Sander van der Heyden



On 15 December 2016 at 11:16, Sander van der Heyden < sandervanderheyden@musonisystem.com>
wrote:

> Hi Adi,
>
> Was wondering if you had seen my previous mail?
>
> In addition we've also got an issue when backdating the interest 
> recalculation loans that have compounding on Interest enabled, and use 
> the "Same as repayment period" compounding type for interest and principal.
> This sample loan (https://demo.openmf.org/#/loanaccount/333/disburse)  
> cannot be disbursed as a result of an EMI error:
> *error.msg.loanschedule.emi.amount.must.be.greter.than.interest*, when 
> you disburse with date of 1st of October.
>
> If you try to disburse as per 1st of November then it does work fine, 
> which leads me to believe there is an issue in the error handling 
> around compounding for backdated loans. As there are no params on a 
> loan level, that we can adjust to not trigger interest recalculation 
> when disbursing I'm not sure how to get around this one?
>
> Thanks,
> Sander
>
>
>
>
> Sander van der Heyden
>
> CTO Musoni Services
>
>
>
>
> Mobile (NL): +31 (0)6 14239505
> Skype: s.vdheyden
> Website: musonisystem.com
> Follow us on Twitter!  <https://twitter.com/musonimfi> Postal address: 
> Hillegomstraat 12-14, office 0.09, 1058 LS, Amsterdam, The Netherlands
>
> On 13 December 2016 at 08:52, Sander van der Heyden < 
> sandervanderheyden@musonisystem.com> wrote:
>
>> Hi Adi,
>>
>> Thanks for your feedback, but not sure whether we can make this 
>> calculation work, see attached excel using the same logic. It works 
>> fine for working out instalment one, but does leave us with a 0.4 
>> difference on the second instalment compared to today's schedule. 
>> Could you let me know where we are going wrong, or whether this is actually a bug?
>>
>> Thanks,
>> Sander
>>
>>
>>
>> On 12 December 2016 at 06:20, Adi Raju 
>> <adi.raju@confluxtechnologies.com>
>> wrote:
>>
>>> Interest calculation on future dates will be based on the assumption 
>>> that payment has been made up-to-date and assuming no arrears.
>>> Interest on the unpaid or compounded amount will be calculated and 
>>> provided as part of schedule only till as of that day.
>>>
>>> So in the example,
>>> EMI is due on 1st  Dec and 2nd Jan. No repayment is made as of today 
>>> (12/12).
>>> So interest calculation will be as follows:
>>> Interest on compounded amount as of 1 Dec for 11 days (1st to 12th 
>>> of
>>> dec)
>>> Plus
>>> Interest on amount as per original schedule for 21 days (13th dec to 
>>> 2nd of jan)
>>>
>>> As and when interest recalculation job runs every day, interest will 
>>> be revised to include calculations as of that day.
>>>
>>> Regards,
>>> Adi Raju
>>>
>>> Principal Architect, Conflux Technologies Pvt Ltd
>>> Address: #304, 2nd Floor, 7th Main Road, HRBR Layout 1st Block, 
>>> Bengaluru, Karnataka, 560043 INDIA
>>>
>>>
>>> Disclaimer: The information contained in this e-mail message and any 
>>> files/attachment transmitted with it is confidential and for the 
>>> sole use of the intended recipient(s) or entity identified. If you 
>>> are not the intended recipient, please email: 
>>> support@confluxtechnologies.com and destroy/delete all copies and 
>>> attachment thereto along with the original message. Any unauthorised 
>>> review, use, disclosure, dissemination, forwarding, printing or 
>>> copying of this email or any action taken in reliance on this e-mail 
>>> is strictly prohibited and is unlawful. The recipient acknowledges 
>>> that Conflux Technologies Private Limited or its subsidiaries and 
>>> associated companies are unable to exercise control or ensure or 
>>> guarantee the integrity of/over the contents of the information 
>>> contained in e-mail transmissions. Before opening any attachments, please check.
>>>
>>>
>>>
>>> -----Original Message-----
>>> From: Sander van der Heyden 
>>> [mailto:sandervanderheyden@musonisystem.com]
>>> Sent: 09 December 2016 22:08
>>> To: dev@fineract.incubator.apache.org
>>> Cc: A good place to start for users or folks new to Mifos.
>>> Subject: Re: Issues in interest recalculation
>>>
>>> Hi Adi,
>>>
>>> Thanks for your feedback, makes sense on the early payments and I 
>>> agree the duplicate instalments is a bug. Looks like the 
>>> holiday/workingdays config is ignored for that bit. However I think 
>>> we'll indeed need to introduce this in the payment schedules as 
>>> well. In addition I found another strange scenario which is: 
>>> https://demo.openmf.org/#/view
>>> loanaccount/321
>>>
>>> Can you explain to me how the calculation for the interest for the 
>>> 2nd instalment is made, so the first instalment which was due 8 days 
>>> ago is now overdue by 8 days and interest (should have) compounded 
>>> as well. However I cannot work out the formula used to get to that 
>>> amount of interest, when running the same example for a loan just 1 
>>> day overdue, I was able to work out the amount, but only as long as 
>>> I calculated 2 extra days. Is there any docs on this on the wiki (I could not
spot them).
>>>
>>> Thanks,
>>> Sander
>>>
>>>
>>>
>>> Sander van der Heyden
>>>
>>> CTO Musoni Services
>>>
>>>
>>>
>>>
>>> Mobile (NL): +31 (0)6 14239505
>>> Skype: s.vdheyden
>>> Website: musonisystem.com
>>> Follow us on Twitter!  <https://twitter.com/musonimfi> Postal address:
>>> Hillegomstraat 12-14, office 0.09, 1058 LS, Amsterdam, The 
>>> Netherlands
>>>
>>> On 8 December 2016 at 06:23, Adi Raju 
>>> <adi.raju@confluxtechnologies.com>
>>> wrote:
>>>
>>> > Hi Sander
>>> >
>>> > PSB
>>> >
>>> > Regards,
>>> > Adi Raju
>>> >
>>> > Principal Architect, Conflux Technologies Pvt Ltd
>>> > Address: #304, 2nd Floor, 7th Main Road, HRBR Layout 1st Block, 
>>> > Bengaluru, Karnataka, 560043 INDIA
>>> >
>>> >
>>> > Disclaimer: The information contained in this e-mail message and 
>>> > any files/attachment transmitted with it is confidential and for 
>>> > the sole use of the intended recipient(s) or entity identified. If 
>>> > you are not the intended recipient, please email: 
>>> > support@confluxtechnologies.com and destroy/delete all copies and 
>>> > attachment thereto along with the original message. Any 
>>> > unauthorised review, use, disclosure, dissemination, forwarding, 
>>> > printing or copying of this email or any action taken in reliance 
>>> > on this e-mail is strictly prohibited and is unlawful. The 
>>> > recipient acknowledges that Conflux Technologies Private Limited 
>>> > or its subsidiaries and associated companies are unable to 
>>> > exercise control or ensure or guarantee the integrity of/over the 
>>> > contents of the information contained in e-mail transmissions. Before opening
any attachments, please check.
>>> >
>>> >
>>> >
>>> >
>>> > -----Original Message-----
>>> > From: Sander van der Heyden
>>> > [mailto:sandervanderheyden@musonisystem.com]
>>> > Sent: 07 December 2016 22:24
>>> > To: dev@fineract.incubator.apache.org
>>> > Cc: A good place to start for users or folks new to Mifos.
>>> > Subject: Re: Issues in interest recalculation
>>> >
>>> > Hi Adi,
>>> >
>>> > Thanks for your feedback. I already left some test cases on the 
>>> > demo (but have updated the same product in between so you'll need 
>>> > to check the derived data for these). I'll work on some more cases 
>>> > that we've seen locally tomorrow, but these are the ones that were already
there.
>>> >
>>> >
>>> > *Incorrect interest in Loan Schedule for first instalment when 
>>> > making an early payment* See 
>>> > https://demo.openmf.org/#/viewloanaccount/302,
>>> > where you see 3.85 of interest paid on the summary and loan 
>>> > transactions, yet the
>>> > 3.85 is still due on the instalment and if you look at the 
>>> > schedule via the API is reported as outstanding interest (which 
>>> > the transaction has already paid).
>>> >
>>> > [Adi] In case of interest recalculation enabled loans, there is no 
>>> > way to realise a complete EMI components whose due date is in the future.
>>> > Any early payments gets adjusted to the principal, and hence there 
>>> > will be some interest component which will remain due as of the 
>>> > future due date. From calculations or schedule point of view the 
>>> > early paid amount is completely getting adjusted to Principal and 
>>> > interest is
>>> pending.
>>> > Repayment strategy decides the splitting of components in a
>>> transaction.
>>> > Looks like the repayment strategy needs a correction not to 
>>> > consider the interest component in case of early payment.
>>> >
>>> > *Interest recalculation causes incorrect schedule with duplicate
>>> > instalments* For the daily loans with duplicate instalments see:
>>> > https://demo.openmf.org/#/viewloanaccount/304, where you can see 
>>> > that
>>> > 2 payments fall due on the same day. If you undo disburse the loan 
>>> > and preview the schedule before disbursement you'll not see 
>>> > duplicate payments on the same day.
>>> > [Adi] As I see original schedule is fine, but during repayments 
>>> > some duplicates are seen. This is definitely a bug.
>>> >
>>> > Thanks,
>>> > Sander
>>> >
>>> >
>>> >
>>> >
>>> > Sander van der Heyden
>>> >
>>> > CTO Musoni Services
>>> >
>>> >
>>> >
>>> >
>>> > Mobile (NL): +31 (0)6 14239505
>>> > Skype: s.vdheyden
>>> > Website: musonisystem.com
>>> > Follow us on Twitter!  <https://twitter.com/musonimfi> Postal address:
>>> > Hillegomstraat 12-14, office 0.09, 1058 LS, Amsterdam, The 
>>> > Netherlands
>>> >
>>> > On 7 December 2016 at 11:20, Adi Raju 
>>> > <adi.raju@confluxtechnologies.com>
>>> > wrote:
>>> >
>>> > > Hi Sander,
>>> > >
>>> > > Interest recalculation is allowed only when "Calculate interest 
>>> > > for exact days in partial period" is enabled in product definition.
>>> > > Consider the scenario: holidays calendar is empty, all days are 
>>> > > considered working days and payments are always on time, you 
>>> > > will see the interest applied equally with interest rate 1% 
>>> > > considering 12%pa interest with monthly payment period.
>>> > >
>>> > > In case there is any date difference due to holidays/working 
>>> > > days consideration or early payments etc, the calculation 
>>> > > happens as
>>> follows:
>>> > > Assume installment is falling on 1st Feb, but due to holiday the 
>>> > > installment is postponed to 2nd Feb and consider 12%pa interest rate.
>>> > > Interest for the whole month of Jan is calculated at 1% and 
>>> > > interest for the 1 additional day in Feb is calculated as 1%*(1/28).
>>> > > For the installment on 1st Mar, interest is calculated as 
>>> > > 1%*(27/28) would be used.
>>> > > This is how the current interest recalculation happens to make 
>>> > > sure the interest is collected for each and every day.
>>> > > And partial interest for any day is calculated based on the 
>>> > > number of days in the loan installment period.
>>> > >
>>> > > I am unable to reproduce other issues that you have mentioned. 
>>> > > Looks like they are linked to some other factors as well. If you 
>>> > > can reproduce them on demo.openmf.org and provide with loan ids 
>>> > > or relevant details, we can get back with clarifications or 
>>> > > verify if it is
>>> > really a bug.
>>> > >
>>> > > Regards,
>>> > > Adi Raju
>>> > >
>>> > > Principal Architect, Conflux Technologies Pvt Ltd
>>> > > Address: #304, 2nd Floor, 7th Main Road, HRBR Layout 1st Block, 
>>> > > Bengaluru, Karnataka, 560043 INDIA
>>> > >
>>> > >
>>> > > Disclaimer: The information contained in this e-mail message and 
>>> > > any files/attachment transmitted with it is confidential and for 
>>> > > the sole use of the intended recipient(s) or entity identified. 
>>> > > If you are not the intended recipient, please email:
>>> > > support@confluxtechnologies.com and destroy/delete all copies 
>>> > > and attachment thereto along with the original message. Any 
>>> > > unauthorised review, use, disclosure, dissemination, forwarding, 
>>> > > printing or copying of this email or any action taken in 
>>> > > reliance on this e-mail is strictly prohibited and is unlawful. 
>>> > > The recipient acknowledges that Conflux Technologies Private 
>>> > > Limited or its subsidiaries and associated companies are unable 
>>> > > to exercise control or ensure or guarantee the integrity of/over 
>>> > > the contents of the information contained in e-mail 
>>> > > transmissions. Before opening any attachments,
>>> please check.
>>> > >
>>> > >
>>> > >
>>> > >
>>> > > -----Original Message-----
>>> > > From: Sander van der Heyden
>>> > > [mailto:sandervanderheyden@musonisystem.com]
>>> > > Sent: 05 December 2016 17:06
>>> > > To: dev@fineract.incubator.apache.org; A good place to start for 
>>> > > users or folks new to Mifos.
>>> > > Subject: Issues in interest recalculation
>>> > >
>>> > > Hi All,
>>> > >
>>> > > We've been doing a relatively extensive round of testing on 
>>> > > interest recalculation loans and found the following issues (on
>>> demo.openmf.org).
>>> > > All of the cases below have:
>>> > > - Interest recalculation on
>>> > > - Interest calculation = same as repayment period
>>> > > - Amortization set to Equal instalments
>>> > > - Advance payments set to Reduce EMI Amount
>>> > > - No grace periods
>>> > > - No sliding interest rates, or multi-disbursements
>>> > > - No fixed EMI amounts
>>> > >
>>> > > I've not yet created JIRA items on it, because I was wondering 
>>> > > whether other people had seen these and there was a work-around 
>>> > > by specifying the right params? Also when trying to debug some 
>>> > > of this I think the calculations have now been made so 
>>> > > incredibly complex that it is very hard to fix some of these 
>>> > > without creating other
>>> bugs in exchange.
>>> > >
>>> > > *Daily interest on Same as Repayment period* On monthly loans, 
>>> > > even though same as repayment period is selected, the interest 
>>> > > calculation seems to happen on a daily basis. We see jumps up 
>>> > > and down in the schedule, which should not happen especially 
>>> > > before any payments are made, as in that case the interest 
>>> > > calculation should be identical for each month (we are using 
>>> > > same as repayment period) and therefore the interest amount 
>>> > > should always drop month over month, with principal
>>> > going up.
>>> > >
>>> > > *Incorrect interest in Loan Schedule for first instalment when 
>>> > > making an early payment* When setting up any interest 
>>> > > recalculation loan, and making an early payment on the first 
>>> > > instalment, this updates the schedule with all of it going to 
>>> > > principal, leaving the interest outstanding. However the actual 
>>> > > transaction does split part of it to interest and so does the loan
summary.
>>> > > In subsequent instalments this no longer happens.
>>> > >
>>> > > *Interest recalculation causes incorrect schedule with duplicate
>>> > > instalments*
>>> > > On a daily loan, when an installment was originally due on a 
>>> > > weekend day, it get's pushed forward, skipping that day 
>>> > > correctly. However in recalculation this is no longer happening 
>>> > > therefore introducing 2 installments on the same date one with a 
>>> > > 0 length. So what happens is pre-correction you have an 
>>> > > instalment on the 3rd of December, then one on the 5th (skipping 
>>> > > sunday). After the payment and recalculation it has 2 
>>> > > instalments due on the 5th, one with 0 days
>>> and no interest.
>>> > >
>>> > > *Single instalment loans do not recalculate* When a loan with 1 
>>> > > instalment is created and the client prepays on that one 
>>> > > instalment, interest is not recalculated.
>>> > >
>>> > > *Early payment of all principal throws an EMI error* When 
>>> > > repaying the full principal due on the loan in an early 
>>> > > instalment it throws an EMI error, which should not happen, 
>>> > > there is still a bit of interest to pay, but no more principal. 
>>> > > This means the schedule should just show that interest remaining 
>>> > > (or close the loan as there
>>> is no interest).
>>> > >
>>> > >
>>> > > Thanks,
>>> > > Sander
>>> > >
>>> > >
>>> >
>>> >
>>>
>>>
>>
>


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