Payment Pouring
The ordering in which payments are allocated when paying off borrower debts
Overview
Payment Pouring in Canopy's system is referencing the ordering in which payments get allocated against balances that are due. This ordering is specific and affects how debts are repaid on Canopy's system. Our default sorting system has been created with industry experts to be the favorable configuration that supports most use cases for credit and installment-based products.
For those interested in other configurations please contact our Sales and Client Delivery team for more details on additional options.
Payment Pouring Ordering
Default Payment Pouring Order
The default payment pouring is a common use case that some institutions follow and it supports installments, loans, and revolving lines of credit.
The order is as follows:
- Pay all the late
FEES
starting from the most aged fee due - Pay all of the due
INTEREST
or amortized fees from the most aged due - Pay all of the owed
PRICINPAL
paying off the most aged first - If they still paid extra, they then start paying off the most aged draw
PRINCIPAL
from the last month of the most aged cycle - Any
INTEREST
that was due in the months that have been paid off is now no longer accrued or owed
Specific Allocation Pouring
Specific Allocation pouring happens during specific actions within Canopy's system. These actions can be PAYMENTS
orOFFSETS
with allocations selected in any of the three options of PRINCIPAL
, INTEREST
, or FEE
The ordering of these events is as follows:
- Pay off the
PAST_DUE
amount for the selected allocation - Pay off the
CURRENT_DUE
amount for the selected allocation - Pay off the remaining balance for the selected allocation
- Then follow default payment pouring for the account
The other form or allocation specification is present in line item loans, with loan specific PAYMENTS
or OFFSETS
. In these scenarios you also have the three allocation options PRINCIPAL
, INTEREST
, or FEE
, but the payment will be directed at a specific line item loan selected by LINE_ITEM_ID
.
The ordering of these events is as follows:
- Pay off the
PAST_DUE
for the selected allocation - Pay off the
CURRENT_DUE
for the selected allocation - Pay off the remaining balance for the selected allocation
- Then pour into the
LINE_ITEM
Loan that was selected- Starting with
FEE
,INTEREST
, thenPRINCIPAL
by the most aged balance in each allocation
- Starting with
- Then follow default payment pouring for the account
Updated 7 months ago