Overview

Amortization Schedules are meant to provide as much information about the past, current, and future states of a loan as possible. They are made up of a set of information about actual and expected balances and borrower behavior. Amortization Schedules are split up into a number of cycles, where each cycle represents a period of time ending in a due date, and an obligation of the borrower to make a payment.

Amortization Schedules are reactive to borrower behavior. They are updated in real-time based on the cycle and payment activities that occur on the account. Cycles in the past show actual results of borrower behavior, while cycles in the future show the expectations of the borrower based on the configuration and contractual agreements of the loan.

Amortization Schedule Behavior

There are two ways that Amortization Schedules are updated

1. Amortization Reforcast:

This is when there is a borrower action or inaction that causes the expected schedule of payments for the borrower to change but does not cause the rate in which principal and interest are due in each amortization period to change. For example, this includes when a payment is made, when a payment is reversed, or when a due date is missed.

When a borrower makes or has a payment reversed, the following occurs:

cycle_payments_cents of the current cycle is updated to include the new payment or reversed payment

paid_on_time is updated to true if the borrower fulfills the payment obligation of the current cycle or false if the reversal leads to the payment not being fulfilled

am_end_total_balance_cents and am_end_principal_balance_cents are updated if the borrower pays more than the minimum payment. When a borrower overpays, the ending balances of the loan will be lower than originally expected

Updating the ending balance of one cycle means the starting balance of the following cycle must change. This means all following cycles will be updated to reflect this updated information about the loan. Overpayments for principal-based interest will cause a decrease in the amount of interest accrued in each following cycle

When a due date elapses, the following occurs:

paid_on_time is updated to false if the borrower did not fulfill the payment obligation of the elapsed cycle

am_end_total_balance_cents and am_end_principal_balance_cents are updated if the borrower did not fulfill the payment obligation of the elapsed cycle

Updating the ending balance of one cycle means the starting balance of the following cycle must change. When a borrower misses or underpays a payment obligation during a cycle, they are expected to make up for the missing amount in the following cycle. This means a missed or underpaid payment obligation only directly affects the following cycle; cycles after the following cycle are expected to remain as-is

If the borrower misses or underpays a payment obligation in the final cycle of a loan, the Amortization Schedule will be appended with a new record reflecting a new payment obligation made up of the missed due amount

am_min_pay_cents (and its associated balance types, am_deferred_cents, am_fees_cents, am_interest_cents, am_principal_cents) of the following cycle are updated if the borrower did not fulfill the payment obligation of the elapsed cycle

2. Re-Amortization:

This is when the rate of amortization changes causing a change to the amounts owed in every am period. For example, this occurs when there is a loan restructuring, a loan has final cycle balloon payments, or there is an outstanding balance based on interest changes for a loan without final balloon installments.

In all re-amortization cases the following occurs:

A new amortization schedule is generated, and the previous history is maintained. This new re-amortized schedule shows the new due date obligations for borrowers. Any unpaid amounts from the previous amortization schedule will remain outstanding, and borrowers will need to pay off these amounts to move out of a delinquent state.

For more detail on what loan restructuring is and how it impacts borrowers take a look at the loan restructuring page

Amortization Schedule Properties

Dates

There are two key dates associated with each cycle:

cycle_exclusive_end is the end date of the cycle
min_pay_due_at is the due date for the cycle

Principal & Balance

Each cycle also includes information about principal and total loan balances:

am_start_principal_balance_cents is the principal balance of the loan at the start of the cycle
am_start_total_balance_cents is the total balance, inclusive of principal, interest, amortized deferred interest, and amortized fees, at the start of the cycle
am_end_principal_balance_cents is the principal balance at the end of the cycle after payments have been made
am_end_total_balance_cents is the total balance, inclusive of principal, interest, amortized deferred interest, and amortized fees, at the end of the cycle after payments have been made

Minimum Payment

A cycle has a minimum payment due, which is broken down into four balance types:

am_min_pay_cents is the total amount due for the cycle, and is the sum of the four following balance types
am_principal_cents is the amount due that will be allocated towards the principal balance of the loan
am_interest_cents is the amount due that will be allocated towards interest balances accrued from the loan
am_fees_cents is the amount due that will be allocated towards amortized fees associated with this loan
am_deferred_cents is the amount due that will be allocated towards amortized deferred interest associated with this loan

Metadata

Finally, some metadata about the loan is included:

am_cycle_payments_cents is the amount of any payments made during the cycle (after the previous due date, but before this cycle's due date) that were allocated towards this loan (including associated balances such as interest, amortized fees, and amortized deferred interest)
paid_on_time indicates whether the borrower has fulfilled their payment obligation by the cycle's due date. This will be a null value until either the borrower fulfills their payment obligation, at which point this will be true, or the due date elapses without the borrower fulfilling their payment obligation, at which point this will be false.

How To Access

Create A New Loan

An amortization schedule is created when a new loan is created on an account.

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Create a Line Item Loan

Open Recipe

Get an Existing Am Schedule

You can get an existing amortization schedule via the am schedule API request.

Preview

It may be beneficial to see a preview of an amortization schedule for an unbooked loan. See how using the recipe below:

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Calculate an Amortization Schedule for a Loan