Rental & Repayment Plan
The rental and repayment plan calculation screen provides the financial details associated with renting or leasing a product or service, as well as the repayment plan for any associated loans or financing arrangements. It allows users to evaluate different scenarios, understand the costs involved, and make informed decisions based on their financial capabilities and requirements.
These calculations can be parametrized on the basis of rental calculation, repayment plan calculation, start date, payment mode, payment frequency, payment duration in months, lending amount, residual value, interest rate and extension days. Moreover user can input irregular payments and income posting details before calculating rental and repayment plan.
After completing calculations rental details are displayed under term from, term to, rental amount and rental type columns whereas repayment plan displays details under rental number, rental due date, opening principal, rental amount, principal amount, interest, periodic interest and closing principal columns and incoming posting under serial number, rental number, posting date, number of days, from date, to date and amount columns.
Rental & Repayment Plan
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Rental Calculation refers to methods used to calculate rental payments. The specific method used can depend on factors such as the type of property, local market practices, and the terms agreed upon between the lender and borrower. Rental calculation methods include annuity, annuity - actual 360, annuity - actual 365, flat and equal principal.
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Annuity is a series of regular rental payments over a specific period.
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Annuity - Actual 360 is a series of regular rental payments over a specific period where the year is assumed to have 360 days.
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Annuity - Actual 365 is a series of regular rental payments over a specific period where the year is assumed to have 365 days.
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Flat is a straightforward approach where the borrower pays a fixed, constant amount of rental payment throughout the lease term.
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Equal Principal is a way to determine rental payments where the principal amount is evenly distributed over the lease term.
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Repayment Plan Calculation refers to methods used to calculate/generate repayment plan. It depends upon the drop down option selected earlier as rental calculation method.
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Start Date the date from when the rental calculation is required to be calculated. By default, current date is displayed.
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Payment Mode refers to how the payments on a loan or credit agreement are structured. Two common payment modes are "advance" and "arrears."
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Advance Payment Mode: In advance payment mode, the borrower makes the payment at the beginning of the specified period. For example, if you have a monthly payment schedule and the payment mode is set to advance, you would make the payment at the start of each month. This means that the payment covers the upcoming period of time.
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Arrears Payment Mode: In arrears payment mode, the borrower makes the payment at the end of the specified period. Using the same example of a monthly payment schedule, if the payment mode is set to arrears, you would make the payment at the end of each month, after the period has elapsed.
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Payment Frequency refers to how often you make payments on a loan or credit agreement. The frequency can vary depending on the terms of the agreement and the preferences of the lender and borrower. Payment frequency options include weekly, fortnightly, monthly, quarterly, semi-annually and annually.
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Weekly: Payments are made on a weekly basis, with 52 payments in a year.
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Fortnightly: Payments are made every two weeks, resulting in 26 payments in a year.
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Monthly: Payments are made once a month, with 12 payments in a year.
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Quarterly: Payments are made every three months, resulting in four payments in a year.
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Semi-annually: Payments are made twice a year, with two payments in a year.
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Annually: Payments are made once a year, resulting in a single payment in a year.
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The Contract Duration in Months refers to the length of time for which a loan or credit agreement is valid. It represents the agreed-upon period during which payments will be made until the loan is fully paid off or the credit agreement is fulfilled. The contract duration can vary depending on the type of loan, the lender's terms, and the borrower's preferences. For example, a common contract duration for a personal loan or a car loan could be 12 months, 24 months, 36 months, or longer.
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Lending Amount refers to the total amount of money being borrowed or financed by the lender or financial institution to fund a purchase or transaction in favour of a borrower. Simply it represents the amount of money that is being provided by the lender to the borrower.
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Residual Value refers to the estimated value of an asset at the end of its useful life or lease term. It is commonly used in leasing or financing agreements, particularly for assets such as vehicles, equipment, or real estate.
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Interest Rate is a percentage that represents the cost of borrowing funds from a lender. It is applied to the principal amount of a loan or credit agreement. The interest rate is one of the key factors that determine the total cost of borrowing and influences the amount of interest you will pay over the loan term.
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Irregular Payments section is used to define any irregular rental payments other than regular rental payments. Click on the required radio button under Irregular Payments section of window. If user clicks on No the regular rental payments are calculated and if user clicks on Yes then user is required to input details of irregular payments. Term From and Term To are used to input starting term number and ending term number for irregular payment. Amount refers to the amount of rental payment. Irregular payment Type can be:
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Structured means payments of different amounts in different intervals over a specified period i.e. term from and term to defined for respective irregular rental payments.
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Interest Only where the borrower pays only the interest portion of rental for a specified period, without reducing the principal balance.
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Auto refers that respective rental repayment is auto manically generated by system for respective term from and term to defined for irregular rental payment.
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Zero where the borrower pays zero amount of rental for a specified period.
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User can add more than one records under Irregular Payments by clicking Add More button.
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Users have the convenient option to control Income Posting preferences before generating rental and repayment plan calculations. By simply clicking the radio button for "Yes" or "No," users can signify whether they want income posting considerations to be factored into the calculations or not.
Irregular Payments/Income Posting
- Click on the Calculate button to view Rental Calculation details displayed under Term From, Term To, Rental Amount and Rental Type columns.
Rental Calculation
- Repayment Plan details are displayed under Rental #, Due Date, Opening Principal, Rental amount, Principal, Interest, Periodic Interest and Closing Principal columns.
Repayment Plan
- By clicking on the Export button, users can seamlessly extract and save the detailed results of their rental calculations or repayment plans in a format suitable for their needs.