Setting Up the New Indirect Loan
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The New Loan - Setup tab establishes a new loan for a member. If the individual receiving the loan is not a credit union member, add the individual as a new member using New Member & Services before completing the New Loan - Setup tab.
To specify a new loan as indirect, select the indirect loan type from the Loan Type drop-down list. The calculated upfront reserve and reserve type from the Calculators - Indirect Truth-In-Lending tab is transferred to the New Loan - Indirect Loan Setup tab. The New Loan - Indirect Loan Setup tab contains the additional indirect lending data for a member loan.
How do I? and Field Help
Complete the following fields to add the indirect loan information.
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Enter the unique dealer ID used to identify the dealer. Keyword: DN Length: 6 alphanumeric |
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Enter the type of reserve processing to be used as defined on the Reserve Information - Maintenance window and associated with a dealer on the Dealer Information - Maintenance window. Keyword: DR Length: 2 alphanumeric |
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Enter the rate at which the financial institution requires the loan to yield. An example of this would be a situation where the stated annual percentage rate is 7.25% on the face of the loan note. The financial institution buys this loan from the dealer at a buy rate of 6.25%. If left blank, the buy rate will be calculated by the system if the reserve type is not flat. The buy rate must be less than or equal to the stated annual percentage rate (Effective Rate). If the reserve type is flat fee, the buy rate (Loan Buy Rate) must equal the stated annual percentage rate (Effective Rate). The interest rate can be equal to or greater than zero but less than 36.500. Keyword: BY Length: 6 numeric including decimal |
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Enter the total upfront amount to be paid to the dealer for the loan. If the reserve type is flat use the flat fee table from the Flat Fee Schedule - Maintenance window, to determine the upfront reserve amount by matching the loan balance with the appropriate range of loan balances in the table. If the reserve type is split, calculate the upfront reserve using this formula: Spread Interest (Primary Rate Interest - Buy Rate Interest) multiplied by the dealer split from the Reserve Information - Maintenance window. If the upfront reserve from the flat fee table is greater than the calculated upfront reserve, then use the upfront reserve from the flat fee table. Keyword: AX Length: 8 numeric including decimal |
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Enter the guaranteed amount the dealer is paid for the loan. The dealer may be liable for this amount if the loan is defaulted. Keyword: IR Length: 10 numeric including decimal |
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Enter the difference between the buy rate and the annual percentage rate on the loan. If left blank, the spread will be calculated by the system if the reserve type is not flat. Keyword: IS Length: 5 numeric including decimal |
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Select the Member Setup Fee Due from Dealer check box to charge the dealer a member setup fee. Keyword: MX |
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If the Amortization field in the Indirect Loan Options section on the Credit Union Profile – Loans tab is Straight Line Method - Term, the Straight Line Number of Months field will appear. Portico will calculate the number of months based on the loan's term and payment frequency. If necessary, you can enter a specific value in this field. Length: 3 numeric Keyword: MA Reporting Analytics: Months to Amortize (Located in Loan/Indirect Loan subject ) |
Click Next to continue setting up the loan. Click Cancel to stop setting up the loan.
The amount entered into the upfront reserve will be posted as a debit to the deferred fee general ledger account on the Loan Profiles - Account Information tab and a credit to dealer holdback general ledger account in the Indirect Loan Options section on the Credit Union Profile - Loans tab.
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To reverse the transaction on the same day, perform the Reversals - Same Day Reversals tab. For a prior-day correction, perform the Reversals - Prior Day Loan Reversal tab or update the information on the Loans - Indirect Info tab.
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