NetLoan - Pay Off Remaining Balance

Use Case: The Pay Off Remaining Balance modification can be used to pay off the remainder of the loan balance in the upcoming period to be processed.

Prerequisites: Loan modifications must be entered in NetLoan within the month and prior to month-end amortization

STEP BY STEP PROCESS

  • Navigate to a loan record where the modification is to be recorded and click the Modify Loan button
  • On the Loan Modification click the Modification Type dropdown menu and select Pay Off Remaining Balance

             

  • Next, update the fields as necessary for the loan modification: 

Field 

Description 

Example 

Effective Date Payment

The total amount of the payment to pay off the loan balance, final period interest, and any penalties associated with early pay off.

$10,000

Allocated to Interest

Input the interest to pay upon paying off the loan.

$122.26

Adjustment Amount (Forgiveness/ Penalty)

If applicable, input the forgiveness or early pay-off penalty incurred.

$100.00

Modification Note 

Provide a brief description of the basis and adjustments made with the modification for subsequent support and reference. 

Paid off 18 months early

  • After double-checking inputs for the modification, click Modify Loan
  • You will be navigated back to the loan record where you can refresh until the Refresh button disappears.

  • Note the schedule is reduced down to a single period containing the payoff amount as the payment (monthly processing is still necessary before the loan can be updated to a Status of Fully Paid)

  • If anything was done in error you will be able to reverse the modification by clicking the Reverse Modification button.
    Note: This button will disappear once you have run any journal entries for that month.
  • If there was an Early Pay Off amount specified, the final period will be split out into two periods: one to record a NetLoan Modification Entry with the penalty recorded against gain/loss, and one to record the month’s amortization
    • Debit Loan Type’s “Gain/Loss on Loan Transactions Account” for the Early Pay Off Penalty specified on the Modification 
    • Credit Loan Type’s “Loan Payment Payable Clearing Account” for the Early Pay Off Penalty specified on the Modification 

  • A NetLoan Modification record will be saved on the Modifications subtab of the loan to save historical data before and after the modification

  • Clicking the Edit link will reveal the terms of the loan both before and after the modification


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