Installment Loans

Canopy’s installment engine is architected for precision and lifecycle adaptability. While we support standard amortization, our platform is built to handle the complexities of modern lending—from variable rate commercial facilities to high-volume consumer loans with complex modification needs.

Core Capabilities

1. Precision Interest & Day Count Methodologies

Lenders can granularly define how interest accrues, ensuring alignment with both yield targets and regulatory compliance (e.g., Reg Z).

• Day Count Conventions: Full support for industry standards including 30/360 (US & European), Actual/360, Actual/365, and Actual/Actual.
• Accrual Logic: Configure whether interest compounds daily, monthly, or uses simple interest (non-compounding).
• Variable Rate Engines: Tie interest rates to external indices (SOFR, Prime, LIBOR) with configurable spread adjustments, floors, and ceilings.

2. Restructuring, Recasting & Re-amortization

Modern lending requires the ability to fundamentally alter the amortization curve of an active loan without the administrative burden of originating a new facility.

• Recasting (Principal Paydowns): When a borrower makes a significant lump-sum payment, you can "recast" the loan. This keeps the original maturity date but re-amortizes the remaining balance to lower the borrower's monthly payment.
• Restructuring (Troubled Debt): Fully modify the terms of a distressed loan to prevent default. You can simultaneously extend the term, lower the interest rate, and capitalize past-due interest into a new principal balance.
• Re-amortization (Rate Adjustments): Automatically recalculate payment schedules when variable rates change or when "interest-only" periods end.

3. Refinancing & Renewals (Net Funding)

Streamline the workflow of extinguishing an existing debt obligation and replacing it with a new instrument. Canopy handles the complex accounting of "rolling over" debt without manual reconciliation.

• Cashless Settlement (Netting): The system automatically calculates the payoff amount (Principal + Accrued Interest + Fees) of the existing loan and deducts it from the new loan proceeds. The borrower receives only the "Net Cash Out," eliminating the need for wire transfers back and forth.
• Fee Capitalization: Seamlessly roll closing costs, origination fees, or unpaid interest from the old loan into the principal balance of the new loan.

4. Lifecycle Modifications & Deferrals

Handle temporary "life events" without breaking the loan's core logic.

• Payment Holidays (Skip-a-Pay): Grant borrowers relief by deferring specific installments.

• Modification Logic: You define the outcome of a deferral:

• Extend: Push the maturity date out by the number of deferred periods.

• Balloon: Add the deferred amount to the final payment.

• Capitalization Control: Choose whether deferred interest is added to the principal balance (negative amortization) or tracked separately.

5. Post-Maturity & Default Management

When a loan moves into a distressed state, the rules of engagement change.

• Default Interest Rates: Automatically trigger penalty rates (e.g., Default APR) upon specific triggers.
• Daily Compounding Penalties: Switch from simple interest to daily compounding during default periods to incentivize settlement.
• Charge-Off Accounting: Manage the transition from active asset to recovery, tracking principal vs. interest charge-offs separately for GL reporting.

Use Cases