NetLoan - Balloon Payment Adjustment
Balloon Payment Adjustments
Purpose: Throughout the duration of the loan there might be instances in which you would either need to create or adjust a balloon payment on the loan that would affect the loan schedule. NetLoan makes this process easy and will automatically update the loan schedule going forward using the newly input balloon payment.
Prerequisites: Balloon payment modifications must be entered in NetLoan prior to month-end amortization.
Step-By-Step Process
- If viewing the Loan record you will be able to select the Modify button above the Primary Information.
- Otherwise, navigate to NetLoan > Loan Management > Modification Register > New.
- Make sure the correct Loan and Adjust Loan Terms modification type is selected in the Primary Information section of the modification proposal record.
- (Optional) If you would like the modification proposal to be created with the Approved status you will want to make sure that is selected in the Status dropdown.
- You can then adjust the balloon payment by entering the desired amount in the Adjusted Balloon Payment field in the Modification Information section. Note that you might need to change the Schedule Calculation Type field depending on what variables are known. If you know the monthly payment that would apply after the balloon payment has been adjusted you can use the Default type and enter the monthly payment amount in the adjusted monthly payment field. If this is not known and you would like the system to calculate this then select the Calculate Payment type as shown below (generally recommended). Save the modification proposal when finished.
- On the saved modification proposal record a Modify Loan button will appear which you will then select. A warning box will appear asking you whether you are sure you want to modify the loan. Select OK to proceed.
- You will be redirected to the loan record for the loan you just modified. Select the Refresh button until the refresh button disappears. Once it is no longer visible, the Balloon Payment field will show the adjusted amount in the Schedule Information section as well as in the Loan Schedule along with the new monthly payment moving forward.
- You will also be able to see the modification on the Modification Register by navigating to NetLoan > Loan Management > Modification Register.
- If a modification was entered in error you can select the Reverse Modification button that is located at the top of the lease record. This will reverse the modification you just made. Check out our Modification Reversal article for more information. Note: If the amortization entries for that month have been run you will no longer have the option to reverse the modification.