Loan Screens > Account Information Screen Group > Dealer Information Screen > Dealer Information field group

Entry: User, drop-down field

F/M: Yes

Mnemonic: LNDLCD

Screen: Loans > Account Information > Dealer Information screen

This field is used when amortizing dealer interest. Also see the Dealer Premium Amortization Report and Dealer Premium Trial Balance Report information in DocsOnWeb.

Two methods of amortization are available:

1 - Straight Line (code 1): The straight line method (code 1) is the default. It is most often used for loans with no scheduled payment terms (demand loans) and revolving lines of credit. It is calculated as follows:

(Dealer Prepaid Interest/Premium % Term of the Loan) X the number of months from the date the item was last amortized to the present date. Normally this is one month.

2 - Rule of 78s (code 2): The rule of 78s method (code 2) calculates the amount by taking the difference between the Date Opened to the date the item was last amortized, and the amount figured from the Date Opened to the current date. If the loan has an action code 78 and date (as set up on the Loans > Account Information > Actions, Holds, and Event Letters screen), it calculates by taking the difference between the date last amortized and the action code date.

The formula for each of these amounts is displayed below. "RINO" is the remaining installments in months (Date Opened to the Date Last Amortized, unless the loan has action code 78, in which case it is the difference between the Date Last Amortized and the Action Code Date for action code 78). "OINO" is the original installments (Date Opened to the current date).

[RINO X (RINO + 1)] ÷ [OINO X (OINO + 1)] X Dealer Prepaid Interest/Premium

Example 1:

A dealer opened a loan account in July 2010 with Dealer Prepaid Interest/Premium of of $100. It was last amortized on June 2011. Today's date is July 1, 2011. This amortization method would be calculated as follows:

[11 X (11 + 1)] % [12 X (12 + 1)] X $100 = $84.62

Example 2:

A dealer opened a loan account in July 2010, but wasn't set to start deferring the Dealer Prepaid Interest/Premium until October 2010 (action code 78 date). The date the loan was last amortized was June 2011, and today's date is July 1, 2011. This amortization method would be calculated as follows:

The difference between action code 78 date and the last amortization date is 9 months (RINO).

[9 X (9 + 1)] % [12 X (12 + 1)] X $100 = $57.69