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From "Adi Raju" <adi.r...@confluxtechnologies.com>
Subject RE: What is the purpose of the loan term vs number of repayments?
Date Wed, 23 Nov 2016 07:18:46 GMT
Hi,

 

I can’t see any technical significance from the code either.

 

Regards,

Adi

 

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From: Subramanya M K [mailto:subbus73@gmail.com] 
Sent: 23 November 2016 12:10
To: user@fineract.incubator.apache.org; edcable@mifos.org
Subject: Re: What is the purpose of the loan term vs number of repayments?

 

Hi Ed,

 

My view points / assumptions to have this loan term input fields is as follows;

 

1. The repayment start dates may vary depending on the product or at the option of the borrower.
So, if this field is not an input field, the last installment may fall either beyond the actual
loan end / maturity date (from the date of disbursement) or earlier to the actual loan end
/ maturity date. Because of which the loan contract might have some legal implications.

2. In case of Moratorium period / repayment holiday type of loans the calculation of the loan
term may be wrong. (For example: consider a home loan where the borrower has requested for
5 years loan with an initial repayment holiday of 6 months. In this case actual number of
installments will be 54 & not 60. So, there could be a possibility to consider the loan
term as 4 & a half years (54 months) instead of 5 years.)

3. If there is a restructuring of the loan repayments due to part early payment or delayed
payment, the installment term may vary leading to change in the actual end date of the loan.

 

Thanks and Regards,

 

M.K.Subramanya

SAMVITS, India. 

 

 

On Tue, Nov 22, 2016 at 10:21 PM, Ed Cable <edcable@mifos.org> wrote:

Hi community,

 

Could somebody explain to me why we have an input field for loan term in addition to number
of repayments. 

 

It always just seemed like an extraneous field that one manually had compute in one's head
based on the number of repayments multiplied by the repayment frequency.

 

Why I think it should be removed:

 

1) It's confusing to the user and extraneous

2) It also appears that it really has no bearing on the actual term of the loan as the only
validation for term is that loan term frequency must match that of repayment frequency. However
if you submit a loan account with a term of 24 months and 12 monthly repayments, the repayment
schedule rightfully has 12 monthly installments.

3) Term is nowhere to be found in the loan product configuration, just the configuration of
number of repayments. 

 

Am I missing some use case whereby a loan has a term or maturity date that's longer than the
number of installments 

 

If so, shouldn't we then only make this configurable when so desired since it's an edge case.





 

-- 

Ed Cable

Director of Community Programs, Mifos Initiative

edcable@mifos.org | Skype: edcable | Mobile: +1.484.477.8649

 

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