1

Refund at Rule of 78

Upon payoff, any fees or costs that are eligible to be refunded back to the customer will be paid to the customer according to the amount calculated by the Rule of 78s (sum of digits).

2

No Refund After Refund Days

If this option is selected, fees or costs will not be refunded after the loan has been opened for more than the number of days in the Refund Days field.

3

Refund Before Days, Minimum $25.00

Select this option to refund fees and costs if the refund is processed before the number of days entered in the Refund Days field. Fees and costs will only be refunded if they add up to more than $25.00.

4

Refund Before Days, If Non-Cash

Select this option to refund fees and costs if the refund is processed before the number of days entered in the Refund Days field. Fees and costs will only be refunded as non-cash, such as to an outstanding loan balance.

5

Refund Within Days, Amortizes After

Select this option to refund fees and costs if the refund is processed within the number of days entered in the Refund Days field. After that, the fees and costs will be amortized according to how this screen is set up.

6

Earn $25.00, Refund Remaining Before Days

If you select this option, and the loan is paid in full within the first 60 days of the loan term, the first $25.00 of the acquisition fee is retained by your institution and the remainder of the acquisition fee will be refunded back to the borrower at a rate of one-sixtieth of the remainder of the acquisition fee per day.

7

Max Earning $25.00, No Refund After Days

This rule will allow up to $25.00 in earning within the number of Refund Days (F1RDYS) based on a 360-day basis with any difference over the $25.00 earned being refunded back to the borrower within the designated refund days. After the number of refund days has passed, the borrower is not eligible for any amount of the fee to be returned.

8

15/16 Day Refund – Open Date: At the time of rebate (at payoff, conversion from precomputed to interest-bearing, etc.), the system compares the day portion of the date opened (LNOPND) to the payoff/cancellation date. If the remainder (number of days) is 15 or less, the system will not take any fee amortization for the payoff month. If the number of days is 16 or more, fee amortization is earned for the whole month.  

Example: The Opened Date is 10-25-13 (the day of the month is the pertinent factor) and the payoff date is 1-17-14. Since more than 15 days have passed between 12-25-13 and 1-17-14, the system would collect a full month of fee amortization for January. Had the number of days between 12-25 and the payoff date been 15 days or less when the payoff was calculated (Loans > Payoff screen), the system would rebate that month's fee amortization to the borrower.

9

15/16 Day Refund – First Due Date: This rule is similar to 8 above, except the system uses the First Due Date instead of the Opened Date to calculate the refund.

Example: The First Due Date is 10-25-13 (the day of the month is the pertinent factor) and the payoff date is 1-17-14. Since more than 15 days have passed between 12-25-13 and 1-17-14, the system would collect a full month of fee amortization for January. Had the number of days between 12-25 and the payoff date been 15 days or less when the payoff was calculated (Loans > Payoff screen), the system would rebate that month's fee amortization to the borrower.

10

1 Day – Open Date: If the payoff/cancellation date occurs on the same day or less as the day of the date opened, then the customer is refunded that month’s amount of the fee amortization. If the payoff/cancellation date occurs one day after the opened date day, your company keeps that month’s amortization.

Example: The Opened Date is 02-10-2014. The loan is paid off early on 07-10-2014. The customer would be refunded back the amount of the fee that was amortized for that month, because the payoff date lands on the same day of the month as the Opened Date. If the loan is paid off on 07-11-2014, your company would keep the amount of the amortized fee for that month, because the payoff date lands one day after the day of the month as the Opened Date.

11

1 Day – First Due Date: This refund rule is similar to 10 above, except instead of using the Opened Date, the system uses the First Due Date to calculate the refund.

Example: The First Due Date is 02-10-2014. The loan is paid off early on 07-10-2014. The customer would be refunded back the amount of the fee that was amortized for that month, because the payoff date lands on the same day of the month as the First Due Date. If the loan is paid off on 07-11-2014, your company would keep the amount of the amortized fee for that month, because the payoff date lands one day after the day of the month as the First Due Date.

12

Prorate 1st Month Refund Within 1st Mnth: In cases when your institution is required by law to refund the first month fee, this rule indicates that the fee will be refunded using the Rule of 78 method prorated over 30 days (using a 360-day basis). The first 30 days are prorated until the first month amount is fully earned. If the account has an extended First Due Date and there are less than 30 days before the First Due Date, only the first month is recognized.

Example: A first month of refund has $12 earned (With an original amount of $78 and a Term of 12). This number is divided by 30 (days in month using 360 basis) and multiplied by 21 (the number of days from open date to payoff). The total earned will be $8.40. The refund to the borrower will be $78 - $8.40 = $69.60.