Overview

The minimum payment due, often shortened to min pay, is the lowest amount of money that a borrower must pay in order to remain in good standing with the lender. Statements provide a point in time for the minimum due for a customer, but Canopy also produces dynamic real-time min pay values that adjust across the lifecycle of the lending product.

Minimum Payment Calculations

The minimum payment calculation varies by the product type:

For Installments

The minimum payment is commonly the total value of the installment spread to an even value over a fixed number of amortization periods
The total minimum payments for an installment loan will always add up to the total outstanding balance

For Revolving and open-ended lending

The most common policy for the minimum payment is a percentage of the total outstanding balance or a fixed amount, whichever is higher.
The minimum payment on a revolving line is the maximum amount of interest a borrower can pay

Factors that impact minimum payment

1. Minimum Payment Calculation

In revolving programs, lenders typically calculate a small percentage, such as 1% or 2%, of the outstanding/total balance to be due each cycle. For example, if a borrower has a balance of $5,000 on their credit card and the card issuer uses a minimum payment calculation of 2% of the outstanding balance, then the minimum payment for the next billing cycle would be $100. Minimum payment calculations are fully configurable with custom rounding, min pay percentages and floors.

2. Outstanding Balance

This is the amount of the balance that the customer owes. Customers can configure which portion of the outstanding balance is considered part of the minimum payment calculation.

3. Fixed Repayment Period

The period of the loan plays a significant role in determining the minimum payment. A shorter repayment period means that the principal will have to be repaid faster, leading to higher minimum payments, while a longer repayment period allows for smaller minimum payments. For example, with a personal loan of $10,000 at a 10% interest rate, a 2-year repayment plan would result in much higher monthly payments than a 5-year plan, because the same amount is being divided over fewer months.

4. Additional Fees

There may be additional fees like late fees, annual fees, or other charges that could be added to the minimum payment. For example, if a borrower misses a payment, a late fee might be added to the balance for the next billing cycle, increasing the minimum payment for that cycle.

How To Access

At Canopy, we expose the min pay in two different locations. We have the Min Pay section of the Statement, which is a snapshot of what is due for a given statement cycle at the time the statement was created. In addition, we have Real Time Min Pay, which gives a view of the current amount of min pay due, incorporating all payments and accrued amounts that has happened in the account until the current time.

Via API

See Statements API Reference for how to access Statement Min Pay.

Via CanopyOS

When in the account detail view in CanopyOS, Real Time Min Pay, along with its various sub-components are displayed in the "Upcoming Payment" box that is on the left hand side of the screen.

Advanced Usage

Real Time Min Pay and Statement Min pay are both accessed in the Get Account API call.

See Statements for other ways of accessing historic statements and their respective min pays.

Minimum Payments