Teller System > Transactions > Loan Transactions > Loan Transaction Codes > Tran Code 2600-07, Regular Payment with CP2 Eligibility

This transaction works exactly like a Regular Payment (tran code 600). It follows all the same rules as a regular payment, except if the amount of payment and refunds would pay off the account, it will display the following message:

REUNDS COULD CLOSE LOAN/SEE PAYOFF

That message means there are enough refunds (such as unearned precomputed interest or insurance premium refunds) on the account that the payment plus refunds would pay off the account. You would then need to run the payment through the Loans > Payoff screen by first locking the loan then using the Post Payoff tab to actually run the transaction.

You would use this transaction, instead of a regular loan payment transaction, if the loan balance is getting low and you want to make sure the payment plus refunds wouldn't pay off the loan first before making the payment.

The following is an example of this transaction:

The history description for this transaction is "Regular Payment."

CP2 Rules on Payoffs

This transaction can be used with the CP2 Transaction Processing Rules screen (function 803/804) in GOLD Services (Application 8).

If, after taking the underpayment into consideration, the amount of credit insurance refunds and/or precomputed interest refund is enough to pay off a loan, the message "REFUNDS COULD CLOSE LOAN/SEE PAYOFF" will be displayed when any of the following transactions are processed:

CP2 transaction (tran code 2600-00)

Insurance Payment (tran code 2600-01)

Collection Payment (tran code 2600-02)

Interest-Only Payment (tran code 2600-03)

Mail-in Payment (tran code 2600-04)

Walk-in Payment (tran code 2600-05)

Regular Payment with CP2 Eligibility Test (tran code 2600-07)

No Advance Payment (tran code 2600-09)

Be aware that these refunds may not in themselves be enough to pay off the loan; it may require a portion of the payment that is being posted.

Example:

The loan balance is $100.00, and the principal and interest is $75.00, leaving $25 of the remaining loan balance to fees and late charges. The refunds total $40.00, if the loan is paid off today. A customer brings in an $80 payment.

As you attempt to post the loan payment using this transaction, the system will return with the following message: "REFUNDS COULD CLOSE LOAN/SEE PAYOFF."

You would not be able to use this transaction. You would instead open the Loans > Payoff screen, lock in the payoff, then post the payoff using the Post Payoff tab. The total amount of the payment, $80, would pay off the principal and interest and $5 of the fees and late charges, leaving $20 more to pay off the loan. Because the loan would be paid off early and therefore be eligible for refunds, the $40 in refunds would pay off the remaining $20 left on the loan, leaving $20 as a refund back to the customer. The loan would then be closed.

The system calculates this for you when running a payoff on the Loans > Payoff screen > Post Payoff tab. Any refunds (credits) will show on the Adjustments tab after the loan has been locked for payoff.