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

Entry: System, numeric

F/M: No

Mnemonic: LNLMTH

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

You must make an entry in this field for the LIP to be considered when interest is calculated. This code determines what interest rate is used to calculate interest and what other rules are followed in processing the LIP account. This field must be entered for interest to be calculated on the loan balance net of the LIP. Also, many reports determine if the loan is an LIP by whether there is an LIP method code or not.

The available method codes are:

Code	Descriptions of LIP Method Codes
000	LIP is no longer in process. All interest is accrued through the regular loan fields. The undisbursed balance is never considered in interest calculations. If LIP disbursements are made, funds will first be disbursed from the customer balance and then from the LIP undisbursed balance. No LIP interest accrual will occur.
001	The loan is in process. All interest accrual uses the LIP interest rate and interest fields on this screen. Interest is calculated by the Interest Calculation Method field. The formula for calculating this interest is: (PRIN-LIPBAL) X Number of Days ÷ Base X LIP Interest Rate A principal credit can be made to the loan balance but regular payments (tran 600) with a teller override (TOV) should be used to make LIP interest payments. However, the interest will continue to accrue using the LIP fields. As disbursements are made from this account, funds will be disbursed first from the customer balance and then from the LIP undisbursed balance. WARNING: If correction tran code 598 is run, the money will be credited to the LIP undisbursed balance and not the customer balance.
002	The loan is both in process and payment. All interest accrual is done using the regular loan interest rate fields or the LIP fields. However, all calculations will assume the principal balance to be the loan principal balance on file less the LIP undisbursed balance on file for interest accrual purposes. When LIP disbursements are made, funds will be disbursed first from the customer balance and then the LIP undisbursed balance. You cannot charge the LIP for interest. All interest is billed to the borrower through the loan fields on the Interest Detail tab. When this code is used, some loan payment methods do not allow for a daily interest accrual. Line-of-credit or interest-bearing loans (payment methods 5 or 6) are recommended with this code.
100	This is the same as 000 except funds are first disbursed from the LIP undisbursed balance until it is reduced to the retention limit, at which time funds will be disbursed from the customer balance.
101	This is the same as 001 except that funds are first disbursed from the LIP undisbursed balance until it is reduced to the retention limit; at which time funds will be disbursed from the customer balance.
102	This is the same as 002 except that funds are first disbursed from the LIP undisbursed balance until it is reduced to the retention limit; at which time funds will be disbursed from the customer balance. You cannot charge the LIP for interest. WARNING: If correction tran code 598 is run, the money will be credited to the LIP undisbursed balance regardless of where the funds were debited from.