NetLoan - Custom Payment Type Overview
Custom Payment Type Overview
Purpose: This article provides you with an overview of why you would need to set up custom payment types and the various configurations at your disposal.
Why create custom payment types?
NetLoan comes with a few different payment types out of the box (see this article for more information). There are some situations in which you may need to configure additional payment types either because you need to automate payments based on specific criteria, a payment requires a different GL impact than that of the available default payment types, or you would like to segregate multiple payments that function similarly out for traceability/reporting. Custom payment types provide you the flexibility you need to track and create entries for all your loan-related payments directly in NetLoan.
What to consider when creating custom payment types?
When creating custom payment types you will first need to determine what the desired GL impact is. Additionally, you will need to determine whether this payment should be automated or manually input into the system. Both of these determinations will in large part drive what parent type you will need to select and what sections of the payment type record will need to be filled out. Use the Parent Type article and the table below as guides when making these decisions. As an additional resource, there are some frequently used payment types listed below that might prove helpful.
Payment Type Selections
| Sections | Description | Setup Articles |
| Parent Type Options | List of the various parent types that can be selected and descriptions of how each parent type behaves | Parent Type Options Setup |
| Primary Information | Designate general payment settings and defaults used by most payment types | Primary Information Setup |
| Amortization Information | Used to set amortization method settings and account defaults (only used by specific payment types) | Amortization Information Setup |
| Auto-Generation | Criteria used to generate payments automatically | Auto-Generation Setup |
| Billing Information | Billing options that determine the item shown on invoices for these payments (only used by specific payment types) | Billing Information Setup |
| Schedule Line Tagging | Selection of custom schedule line fields that break out these payments from other payments on the schedule | Schedule Line Tagging Setup |
Frequently Used Payment Types
| Payment Types | Use Case | Parent Type | Amortized? | Automated? |
| Late Fee | Late fees that are automatically applied to loans with invoices that are past due by a certain number of days | Fee | No | Yes |
| Service Charges | Fees that are charged in addition to each payment made by the borrower | Fee | No | Sometimes |
| Insurance Fees | Fees that increase the loan balance rather than being invoiced to the customer directly that are amortized over the loan term | Principal Adjustment Fee | Yes | No |
| Pass-Through Fees | 3rd party fees that are paid by the lender on behalf of the borrower; are rolled into the loan balance as a long-term receivable; no income is recognized by lender | Principal Adjustment Fee | No | No |