How can I see interest that accrued on unpaid payments?

Question:

I have a question regarding interest accruing on unpaid payments. We have a franchise that is working on their cash flow right now and we wanted to give them an updated statement on what is owed to us for their franchise loan. How can I see interest that accrued on unpaid payments? So for example if their payment was due back in March of last year and they want to make a payment. How can I show them the interest that accrued on that payment?

Answer:

This is found in the “Outstanding” columns:

The interest is a very close approximation since uses a slightly different way of calculating interest than the normal method (really not a big difference, so no need to worry about this).

In the reports see under the Outstanding theme:

 

 

Setting Up Automatic Emails (Reminders) to Your Borrowers

Take a moment to view this video explaining how to set up automatic emails to your borrowers. It is a simple procedure that will allow you to remind your borrowers that a date of payment is coming up.


How to change the Windows Short date format

Margill prefers a date format that contains 4 digits for the year. This is especially important for calculations that may (if these still are out there!) predate the year 2000.

How to change the Windows Short date format:

Windows 10 gives you various ways to change the short date format (Control Panel or Settings)

1) With Control Panel

Type a few letters of the word “Control Panel” in Cortana (bottom left):

Go to Clock and Region and click on “Change date, time or number formats”

Then change your Short date format to the format you want that contains yyyy, MM and dd. You decide on the order these appear in. If none of the choices match, click on “Additional settings” on the bottom right in this window.

You can then type in the missing year digits (y – total 4), month digits (M – total 2)  or day digits (d – total 2)

2) You can also use the Windows key  on your keyboard and X and go to “Settings”:

Click on Time & Language

Find “Related Settings” and click on “Date, time & regional formatting”

Click on “Additional date, time & regional settings”

Click on  “Change date, time or number formats”

Now see the instruction in 1) above to enter the proper “Short date format”.

Can we email an amortization report to each borrower when interest rates change?

Margill Loan Manager – Can we email an amortization report to each borrower when interest rates change?

Yes this can be done.

First, I guess you updated the interest rates though the Main window with Ctrl Alt Shift i. Ideally you have a custom field that identifies the loans that are tied to the specific index (Prime, LIBOR, etc.). With this field you can easily select the proper loans to 1) change the interest rates quickly and 2) send the amortization schedule by email.

You could have the scroll menu with “Prime” or to be more precise “Prime +”

To create the statement to send out, go to Reports > Mail/Email Template > New and create a DocX that offers many more options than the older RTF.

You can then structure the template and enter your logo and add the Merge codes to identify the Borrower, etc. You could also create your statement in Word and copy it here afterwards.

Here is what this could look like (the |105| for example, are Merge fields)…

The merge codes to enter the amortization schedule per se are under the General theme. You can try each to see which is best for you. There are 10 templates and we can program others to meet you exact needs (columns included, titles, etc.).

 

Now that your template is created, test to see if all is good (numbers, names, etc.).

Go to Reports > Document Merge.

You will need to select a date range or show the entire schedule (past, present and future payments). I would opt for a date range to see up to the rate change, not the future.

See the circled red settings below. |991| will be the schedule…

Then press on “Save – Print -Send by Email”.

Here are the options:

You can also add an email  Subject and Message when sending the email.

Email sending must be configured in Tools > Settings > Email Connection. Your IT person will usually set this up properly for each Margill user.

The selected Records will all be sent out by email in a batch. Each takes about 10 seconds to create and send out.

Early payoff – How to do this in Margill Loan Manager

Q: How to do an early payoff in Margill Loan Manager

A: For example, the loan term was originally for 5 years or 60 months (so end date was in June 2020). The borrower calls you, the creditor, and wishes to payoff his/her loan early, on October 12, 2018.

Original payment schedule:

 

I first recommend to take a snapshot of the full 60 month payment schedule – this was we have an easy to consult original payment schedule. Click on “Attach”. A PDF will be attached to the Record.

Next change the date to October 12, change the payment to 0.00 so the payoff balance is now shown (64,297.75 in this case). Notice I also changed the 2018-11-01 payment date to 2018-10-13 to see my daily interest on the balance (4.92 per day).

Change the Payment to 64,297.75 (for Oct 12).

You can then delete the next lines that are no longer required (right mouse click).

You could also decide to add extra fees for an early payoff if the contract included this (use Column fees or Line status fees). This will increase the balance of course.

Also, you could create a special payment-type Line status to identify all your early payoffs. Could be interesting for your reports.

If the final payment is late, nothing stops you from changing this final date to enter the true payment date. Extra interest will accrue.

Margill Loan Manager: Is there an audit trail that can be printed to show transactions / changes to records on a daily basis?

Q: Is there an audit trail that can be printed to show transactions / changes to records on a daily basis?

A: Yes very easily.

Go to the Main Margill window, select all the loans (probably only Active loans) , Tools > Various > Display the history of changes for selected Records.

You can then right click with the mouse to see the changes for the day, yesterday or any period of time.

You can also see the log of changes loan by loan in the Data window of each loan:

How to obtain the daily interest amount (per diem) in Margill Loan Manager

Q: How to obtain the daily interest amount (per diem) in Margill Loan Manager?

A: This can be added very easily through a simple Mathematical Equation. 

Go to Reports > Equation Management and click on  

  1. Name the Equation
  2. Select the two required fields (balance and interest rate) from the various themes on the left
  3. Add the operators with the  button
  4. Divide by 365 days with the  button
  5. Save

You can now use this simple interest Equation in various reports picking it up in the Equations theme:

Record List Customized:

Document Merge (DOCX., RTF, PDF) for your Invoices and Statements:

Interest-only: Regular monthly interest vs. Exact day interest

Question:

My company does interest-only 12 month bridge loans calculated in two ways.

  1. Payments are based on the number of days in a month with a balloon payment at the end (so payments change depending on the month)
  2. Each of the 12 payments is equal with a balloon payment at the end.

Can these two calculation methods be done in Margill?

Answer:

Yes.

In Simple interest, Margill will usually use the exact number of days in a month and in a year to compute the interest. The Day count would be Actual/Actual (or Actual/365 or Actual/360).

If the interest is to be the same every month, the use the 30/360 Day count which simulates months that are of the same length.

For Compound interest (what is called the Effective rate method – the banking method), there is an extra  calculation method option that calculates using the exact number of days and another that splits payment in equal periods. The Day count does not have to be used to “artificially” simulate the equal periods.

Can Margill Loan Manager be used to manage rentals (rent)?

Question: Our company does loans and rentals. Can Margill Loan Manager be used to manage rentals (monthly rents)?

Answer: As strange as this may sound for a loan servicing software, yes Margill Loan Manager can manage rentals.

The difference between a loan and a rental is that loans begin with a principal amount borrowed that usually will decrease as payments are made for the interest and principal portions. Rent on the other hand, is due (accrued), and payable every month. So rent accrues usually on the first of the month and then is paid, hopefully, on the same day. Usually, interest is not charged on rent.

First, in Tools > Settings > Custom Column Titles, change the Column “Fees” title to “Rent”.

Create a new Record. Under Data enter the date at which the first rent is due. The same date should be entered in both Origination Date and First Payment Date. The rents are payable monthly. Principal (Original) should be 0.00 and since there is no interest on the rent, Annual Nominal Rate (%) should also be 0.00%. This is a three year rental for 575 per month. Press on “Add Fees” and a window will allow you to enter the monthly rent amount.

Then press on Compute and answer No to this pop-up. We do not want Margill to compute the Principal (remains 0.00).

The rental payment schedule then appears. I moved my column called “Rent – Accrued” to the left to see it readily without needing to scroll to the right. The rent is “charged” with the “Rent – Accrued” and paid with the “Payment” column.

Notice on line 3 that my rent is a few days late. This does not change anything mathematically since interest is not charged, but this allows you to balance with your banking transactions. A partial rent amount could also have been entered and the schedule then changed based on what was agreed for later repayment between the “landlord” (or equipment rental) and the person who rents.

To be fancy, I renamed a Paid Pmt (x) Line status to “Paid Rent”. Go to Tools > Settings > Line status.

Importing batch payments in Margill Loan Manager (CSV, Excel)

Question: Our company collects weekly (bi-weekly or monthly – no matter) payments drawn directly from their bank accounts in some cases and in others as payroll deductions. We receive CSV files from the bank and processors. Can these transactions then be imported back to Margill Loan Manager?

Answer: As you guessed, since I blogged this, Margill does this no problem.

Each and every line of a payment schedule includes a unique line identifier. If this line identifier can be sent back to Margill from your processor (or accounting or ERP system), the software will automatically change a “Due payment” to a Paid, Late or Partial payment or even an Unpaid payment if your system can send back the Line ID with a payment of 0.00 (most systems don’t actually, so a human may have to decide when this payment eventually is considered Unpaid).

To send the transactions to the bank or to the payroll deduction processor, use the Transaction report with any data you want. Let’s keep it simple by supplying the Name, Transaction date, Transaction amount and Unique Line ID.

This report can then be sent to the processor in Excel, CSV or Text format.

Please note. The file created by Margill is not in NACHA format. We work with third party processors Intrix (US) and Perceptech (Acceo)(Canada) for electronic funds transfers to debit your borrower accounts.

Notice the “Line Unique ID” above – your provider must be able to accept this data and return it with the paid payments in the format below. We highlighted special payments (need not for real…):

  • In C2  we have a Partial payment
  • C4 – Unpaid payment
  • B7 – Late payment
  • B15 – Partial Late
  • C23- Unpaid payment
  • The rest are all normal Paid payments – on time, right amount…

This Excel file is imported to Margill and all payments will be updated in seconds… Errors will be flagged the case being.