Payment Management: How do I refund a customer's overpayment on a paid-off loan?

Sometimes when a borrower makes the last payment to pay off a loan, the payment amount may exceed the remaining balance of the loan plus accrued interest.  This can happen due to timing difference in the number of days of accrued interest.  It often occurs for auto loans when the last payment comes from an insurance company.

A loan automatically becomes paid off when a payment received  through ACH or recorded as Offline Payment on Happy Mango exceeds the loan's remaining principal balance plus accrued interest.  The excess payment amount will be displayed as a negative Remaining Balance on the Loans-Paid Off page and on the Loan Payment Schedule-Current Schedule page. 

You can refund the borrower the excess payment amount through an ACH refund on Happy Mango if the last payment was also made through Happy Mango and within the last 30 days.  Or you can refund the excess offline and record an offline refund payment.  Either method will adjust the Remaining Principal Balance from the negative amount to zero. 

1. Refund through ACH Payment on Happy Mango

Clicking on the blue "Refund" button on the Paid Off page opens a pop-up window as shown below. To refund the customer through ACH, select "ACH Refund".  The next steps follow the typical refund process, which can also be accessed through clicking "Make ACH Payments" then select "Refund a Customer" on the the top right drop down menu.  

The status of the ACH refund will be displayed on the "ACH Processing - Last 30 Days" page accessible from the top right dropdown menu.  Once the ACH refund has been processed, the remaining loan balance will be automatically recalculated and a new entry will appear on the Current Schedule with the Remaining Principal Balance at zero.  

2. Record an Offline Refund

To record an offline refund, you can select "Offline Refund" in the above pop-up window or click the icon next to the negative Remaining Principal Balance displaced on the Loan Payment Schedule-Current schedule page.  The remaining process is the same as recording an offline payment.  Once the payment has been registered, the loan balance will be automatically recalculated.  The recorded offline balance is included in the "Monthly Offline Payments Report" from the Downloadable Reports page accessible from the top right drop down menu.