Offsets are adjustments applied to the balance of a line of credit or loan, representing either positive (credits) or negative (debits) changes to the outstanding amount.
Positive offsets reduce the balance, such as overpayments or refunds, while negative offsets increase the balance, such as additional charges or adjustments. Offsets are used to correct discrepancies, apply manual adjustments, or account for exceptional circumstances (e.g., fee waivers or promotional credits).
They ensure accurate balance tracking and financial reconciliation, providing flexibility to lenders and borrowers in managing the lifecycle of a line or loan. Offsets are logged and visible in the system, maintaining transparency and auditability.
Offset Types
| Value | Description |
|---|---|
| CREDIT OFFSET | A positive adjustment that reduces the outstanding balance of a line or loan, often applied for overpayments, refunds, or promotional credits. |
| DEBIT OFFSET | A negative adjustment that increases the outstanding balance, typically used for additional charges, fees, or corrections to the account. |
| REBATE | A credit offset representing a partial refund or discount, often applied as an incentive or adjustment for specific conditions or promotions. |