Loan Management: How does a loan get charged off?

Loans with payments that have been delinquent for an extended period of time should get charged-off.  Happy Mango does not set the rules on when a delinquent loan gets charged-off.  The loan portfolio manager will decide when to charge off a loan based on its delinquency status.  

The Delinquency Status of an Active Loan

You can find the delinquency status of an active loan in a couple of places on Happy Mango: the Status column on the Active Loans page and the Loan Info Summary section on the top of the Loan Payment Schedule page for each loan. 

A loan becomes delinquent when no payment has been made for 30 days after the last scheduled payment date.  On the 31st day, its Status changes from "OK" to "30D", indicating the loan is 30 days delinquent.  On the 61st day of no payment, its Status changes to "60D".  On the 91st day of no payment, its Status changes to "90D".  The general practice is to charge off the loan after 90 days or after 120 days of no payment.

Move an Active Loan to Charged-Off Using the "Update Status" Button

Charge-offs are not automatic.  To change an active loan to charged-off, you will need to click the blue "Update Status" button on the Loan Payment Schedule page to open a pop-up window.  Then follow the five steps below:

Step 1: Select "Charged-Off" in the "Update Status To" drop-down window 

Step 2: The Charge-Off Amount is typically the unpaid remaining principal balance.  However, it can be a different amount if an off-line payment has been collected.

Step 3: Enter the date of charge-off. 

Step 4: Enter any notes if necessary. 

Step 5: Click the "Update" button to complete.