Installment Loans

Canopy’s installment loan infrastructure is built for flexibility, scalability, and automation. Whether offering traditional term loans, point-of-sale financing, buy-now-pay-later (BNPL) structures, or specialized commercial lending, our platform provides the tools to structure, manage, and optimize repayment terms.

With customizable amortization schedules, dynamic repayment options, and real-time risk management, Canopy ensures that lenders can meet the diverse needs of borrowers while maintaining portfolio performance and compliance.

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Products Supported

Canopy out of the box can support a wide variety of installment based products, follow the links below for information and recipes on how to launch these in your sandbox today.

Term Loans

Core Features for Installment Lending

Customizable Loan Structures

Installment loans come in various forms, and Canopy provides full flexibility in structuring loan terms, including:

• Fixed-term loans with predefined repayment schedules.
• Balloon payments for loans requiring larger lump-sum payments at the end of the term.
• Interest-only periods before transitioning into principal and interest payments.
• Deferred payment plans, supporting promotional or seasonal lending strategies.
• Step-up or step-down payments, adjusting repayment amounts dynamically based on borrower income trends or business cycles.

Lenders can design loan products that align with business goals, borrower affordability, and risk tolerance, ensuring long-term portfolio sustainability.

Flexible Amortization & Repayment Schedules

Canopy supports multiple amortization models, allowing lenders to choose the most suitable structure for their products:

• Standard amortization (fixed principal + interest payments).
• Graduated amortization, where payments increase over time to align with borrower earning potential.
• Negative amortization, where accrued interest may be added to the principal balance for certain structured products.
• Custom payment frequency, including monthly, bi-weekly, weekly, or daily repayment cycles.

By offering full control over repayment structures, Canopy allows lenders to serve both consumer and business borrowers with tailored financial solutions.

Dynamic Interest & Fee Management

Installment loans require precise interest and fee management, which Canopy supports through:

• Fixed or variable interest rates, including step-up or step-down rate adjustments.
• Daily, monthly, or quarterly interest accrual, depending on the loan type.
• Custom fee configurations, including origination fees, prepayment penalties, late fees, and servicing fees.
• Interest rate indexing, allowing loans to adjust based on external benchmarks (e.g., SOFR, Prime Rate).

Lenders can optimize pricing strategies, incentivize early repayment, and ensure compliance with all interest and fee structures easily configurable within the platform.

Automated Loan Servicing & Payments

Automation is key to managing installment loan portfolios efficiently. Canopy provides:

• Automated payment collection through ACH, card payments, or alternative payment rails.
• Auto-adjusting loan balances based on prepayments, partial payments, or rescheduling events.
• Early payoff and refinancing workflows, ensuring smooth borrower transitions between loan structures.
• Delinquency and default management, integrating proactive borrower communication, late fee automation, and collections triggers.

By reducing manual intervention, Canopy enables lenders to scale efficiently while minimizing servicing overhead.

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Operational Benefits