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From Subramanya M K <subbu...@gmail.com>
Subject Re: What is the purpose of the loan term vs number of repayments?
Date Wed, 23 Nov 2016 06:40:00 GMT
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
>
> *Collectively Creating a World of 3 Billion Maries | *http://mifos.org
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>
>

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