Navigation:  Account Delinquency screen > Delinquent Payments tab > Payments Due field group > Loan Fee Variance

Entry: System, numeric

F/M: No

Mnemonic: LNVPRN

 

This is the amount of the unpaid principal held over from past billings because loan fees were paid first, and therefore, the full principal and interest were not paid. 

 

Variance fields keep track of the spread of payments on accounts with a Payment Application setup where Late Charges and Loan Fees are higher in priority than the principal payment. For example, the Payment Application is set to pay late charges first, then fees, then interest, and finally, principal. 

 

The variance is only active when Institution Option ILF6 is turned on and the loan is a payment method 3 or payment method 6.  The Late Charge Variance and Loan Fees Variance fields display the total accumulated amounts of payments that were not fully covered due to late charges or loan fees. The system updates these values every time a payment is made on the account. The amounts in these fields can be reduced by including additional funds in loan payments.

 

Each time a late charge or fee is paid, the Late Charge Variance or Loan Fee Variance field decreases by the amount of the late charge or fee payment.

 

Once the amount in the Late Charge Variance and/or Loan Fee Variance is equal to or greater than the amount of the payment due, a late charge will not be assessed. When this amount drops below the payment due, late charges will resume being assessed. This prevents late charges from being assessed on prior late charges.

 

When a payment is received, if there are amounts in the variance fields, those amounts will only be satisfied after the full principal and interest are paid. Then Institution Option ILF6 will determine whether the payment is enough to "roll" the Due Date.

 

Example 1: The Next Payment Due is for a principal and interest payment of $1,000, and there are $25 dollars remaining in the Late Charge Variance (LNPDUE), and $10 in the Loan Fee Variance (LNVPRN). If a customer makes a payment for $1,100, $1,000 will first go to satisfy the principal and interest of $1,000.  Next, $25 will be applied to the Late Charge Variance, then $10 to the Loan Fee Variance, and finally, the remaining $65 will curtail the principal of the loan.

 

Example 2: The Next Payment Due is for a principal and interest payment of $1,000, and there are $50 in late charges, $25 dollars remaining in the Late Charge Variance (LNPDUE), and $10 in the Loan Fee Variance (LNVPRN). If a customer makes a payment of $1,100, $1,000 will first go to satisfy the principal and interest of $1,000.  Next, $50 will apply to late charges, $25 will apply to the Late Charge Variance, then $10 to the Loan Fee Variance, and finally, the remaining $15 will curtail the principal of the loan.