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In this Tutorial we are looking at the action of “Loan Classification”

If a Loan is unpaid, it may be Classified. From the moment it is Classified, the Interest Calculation on this Loan will change.

On this example that we are looking at, at the moment, we are looking at a Consumer Loan.

 

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It is a very easy procedure to “Classify” a Loan.

When we move to the Actions tab and we insert a Date in the “Date Classified” field, then we are in fact Classifying the Loan from the selected Date.

 

 

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When we “Classify” a Loan, it is also optional to select a New Interest Account to which further Interest Calculations on this Loan will accrue.

In other words, instead of the normal Income Accounts we may re-direct the Interest that will be calculated to a different Account.

 

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From here onwards Interest will be calculated on the stated Balances for the “Classified” Loan.

 

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“De-Classification” is equally easy. We simply remove the Date Classified Value and Save the Master Record and then the Loan is normal again, i.e. “De-Classified”

 

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