Loan Screens > Account Information Screen Group > Account Detail Screen > Account tab > LIP Information field group

Entry: System, numeric

F/M: No

Mnemonic: LNLRAT

Screen: Loans > Account Information > Account Detail > Account tab

In this field, enter the rate by which the interest will be calculated on the funds disbursed from the LIP account when the Method is 001 or 101. Rates are entered as a seven decimal number. For example, 12% would be entered as "12.00000," 12.75% would be entered as "12.75000."

Any time the interest rate is file maintained (online or afterhours), the accrued interest is calculated up to the date of file maintenance at the old rate and then interest begins to accrue at the new rate on the date of file maintenance. The LIP charge amount is also increased by the same amount as the accrued interest is adjusted.

Example:

Accrued interest is $100

Amount disbursed is $5,000

Date last accrued is 9-15

Interest rate is 9%

LIP charge amount is $100

On 9-20 you file maintain the rate to 10%. Interest of 6.16 will accrue at 9% from 9-15 to 9-20, the accrued interest will be increased to 106.16, and the LIP charge amount will also be increased to 106.16.

NOTE

If you attempt to file maintain the LIP interest rate and there are errors on the loan that would cause the accrued interest to not equal the LIP charge amount and the LIP prior, the system will not allow the file maintenance. You will get the error message, "ACCRUED INT NE LIP CHG AMT + PRIOR UNPAID." You must correct the loan before file maintaining the rate. Some items to check for are that the billing date and bill/charge code are correct in comparison to the date last accrued. Also, the accrued interest may not be equal to the total of the LIP charge amount plus prior unpaid amount, etc.

When the LIP Interest Rate changes, either by the system or from file maintenance, the Date Last Accrued is changed to today's date. Also, the Accrued Interest is recalculated to the current date using the old rate. The LIP Charge Amount field is also updated. In all cases, whether the rate is fixed or rolling, this rate is the current rate on the LIP and must be entered at the initial LIP setup. See the Interest Calculation field description for additional details on how the rate works.

WARNING

When this field is updated during the afterhours, the loan rate is also updated. This keeps the LIP interest rate and the loan rate the same.