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https://issues.apache.org/jira/browse/FINERACT-322?page=com.atlassian.jira.plugin.system.issuetabpanels:comment-tabpanel&focusedCommentId=16796592#comment-16796592
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Vishwas Babu A J commented on FINERACT-322:
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[~edcable] : Using "Declining balance" or "Flat" as the interest method would
calculate the interest on the initially generated schedule accordingly. This
issue report doesn't deal with the initial interest calculation, rather the
"Payment apportioning logic", in particular, what happens when a pre-payment is
made?
[~santoshmath] : The user expects the future interest to be recalculated if
there is any prepayment. I would assume that he hasn't used the interest
recalculation option, using the same should mostly meet his requirement. If he
doesn't expect interest recalculation to run in all scenarios (late payment
etc) , you could also use the repayment strategy "Early payment strategy"
instead.
The behavior of early payments on the same is as follows: For any payment that
pays off an installment that occurs before the due date of the installment,
payments are allocated only towards principal payments of future installments.
Interest and fees/penalties of future installments are not paid and may be
waived manually if required. See
[https://demo.openmf.org/api-docs/apiLive.htm#paymentapplicationlogic] for
details
> Rewarding Early Repayment
> -------------------------
>
> Key: FINERACT-322
> URL: https://issues.apache.org/jira/browse/FINERACT-322
> Project: Apache Fineract
> Issue Type: Improvement
> Components: Loan
> Reporter: Santosh Math
> Assignee: Markus Geiss
> Priority: Minor
> Labels: gsoc, p2
>
> Reported by Shepard Chihoro at https://mifosforge.jira.com/browse/MIFOSX-2520
> Original Description:
> MIFOSX does not reward customers who make early repayments on a flat interest
> calculation method.My normal client contract is has a maximum repayment
> period of 6 months and a minimum repayment period of 3 months.On
> disbursement,MIFOSX calculates the interest for the entire 6 months and makes
> principal and interest for 6 months outstanding.In the event that the
> customer repays the full principal in 3 months,the customer`s account remains
> with 3 months interest due.I would like to see interest outstanding being
> stopped once the principal has been repaid in full.
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