Hi,
Adhikar right now using two interest type method 1- Declining Balance
, 2- Declining Balance-Interest Recalculation . But we found almost all the
interest Rate Method having the same repayment features described by you.
On Mon, Jul 2, 2012 at 12:09 AM, Ed Cable <[email protected]> wrote:
> In talking with Pradeep at Adhikar he too has a similar need for the
> ability to the configure the order in which a payment is applied.
>
> Per requirements of India's Central Bank, RBI, payments on overdue account
> must first go toward outstanding interest before any principal is paid off.
>
> So for example if a client has installments of 220 (200 principal + 20
> interest) and has two installments due - one that is current and one that
> is overdue (i.e. 440 - (200 principal + 20 interest on overdue installment
> #1) and (200 principal + 20 interest on current installment #2)has one
> installment overdue and one currently duehas an installment of 200
> principal + 20 interest) but only makes a partial payment of 40.
>
> The payment (per RBI regulations) should be applied to the 20 in interest
> that's overdue and 20 in interest that's currently due.
>
> By default in Mifos, the payment will be applied to the past due interest
> and then the remaining 20 to the principal overdue.
>
> Desired
> Partial Payment of 40
> 20 Payment to interest on Installment #1 (200 principal remaining)
> 20 Payment to interest on Installment #2 (200 principal remaining)
>
> Actual
> Partial Payment of 40
> 20 Payment to interest and 20 Payment to principal on Installment #1 (180
> principal remaining)
> 0 Payment to Installment #2 (200 principal + 20 interest remaining).
>
> Pradeep - could you tell us what interest rate method you are using for
> these loans?
>
> Ed
>
> On Friday, June 15, 2012 4:35:03 AM UTC-7, Lukasz Chudy wrote:
>>
>> Hi Nayan,
>>
>> I agree that the way Mifos calculates the repayment accounting is correct
>> but some MFIs may want to change the default order of payments.
>>
>> So that, I created that improvement issue and we can decide in the future
>> (based on clients requests) if we implement this functionality or not.
>>
>> Best regards,
>> Lukasz
>>
>>
>> On 06/12/2012 11:30 AM, Nayan Ambali wrote:
>>
>> Hi Thomas and Lukasz,
>>
>> I believe the way Mifos calculates the repayment accounting is correct.
>>
>> Refer
>>
>>
>> http://en.wikipedia.org/wiki/**Amortization_schedule<http://en.wikipedia.org/wiki/Amortization_schedule>
>>
>> "A portion of each payment is for interest while the remaining amount
>> is applied towards the principal balance" even though it does not
>> explicitly say the order!
>>
>> The reason is Fees, Penalties and Interest will not used to *recalculate
>> *the next interest amount, it makes very much sense to deduct these
>> thing before reduce the Principle installment.
>>
>> And as per my understanding order of the deduction plays role only
>> when interest is recalculate based on outstanding Principle amount
>> otherwise order does not have any role.
>>
>> Thanks
>> Nayan Ambali
>> http://www.**confluxtechnologies.com/<http://www.confluxtechnologies.com/>
>>
>>
>>
>>
>> On Tue, Jun 12, 2012 at 12:44 PM, Lukasz Chudy <[email protected]>wrote:
>>
>>> Hi Thomas,
>>>
>>> Currently it is not possible to change the order of payment but I
>>> created improvement Jira issue for this functionality:
>>> http://mifosforge.jira.com/**browse/MIFOS-5636<http://mifosforge.jira.com/browse/MIFOS-5636>
>>> .
>>>
>>> Regards,
>>> Lukasz
>>>
>>> On 06/06/2012 01:24 PM, Thomas (Uganda) wrote:
>>> > Hi Team
>>> >
>>> > I understand when a person makes a loan payment in mifos, Penalty is
>>> > deducted first, then Fees, Then Interest and Lastly Principle..
>>> >
>>> > However 2 MFIs I have talked to say it is actually supposed to be the
>>> > other way round Principle paid off first, then Interest, then Fees,
>>> > and Lastly Penalties
>>> >
>>> > My Question is could we possibly have this as a configuration setting
>>> > as per the MFIs order of deductions.
>>> >
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>>
>>
>>
>> --
>> Regards
>> Nayan G. A.
>> 9901154134
>>
>>
>>
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>>
--
*Regards*
Pradeep
*M -* 07894442601
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