Loan Management: How do I modify the remaining payment schedule of an active loan?

A borrower may request a loan modification due to financial hardship, unexpected life events, or the desire to change the payment structure (e.g. switching from monthly to weekly installment payment to align with timing of their paychecks).  Different from "Skip the Next Payment" and "Postpone the Next Payment Due Date", which can be used to delay the next payment due, "Modify Remaining Loan Schedule" can be used to change any key terms of the loan and completely recast the future payment schedule as if starting a new loan. 

Eligibility for Modifying Loan Payment Schedules

This function is available to all active loans that are using Happy Mango for ACH processing of the loan repayments.  In the Product Settings, the first two settings under Servicing/Repayment must select "Yes" as shown below. 

Steps to Modify Loan Terms

1. Open the Loan Payment Schedule page by clicking on a hyperlinked Loan Number

2. Click "Reset Schedule" button

3. Select "Modify Remaining Loan Schedule" 

4. Select and modify the loan terms

Here are a few use case examples to illustrate how this step works:

a. Borrower has been delinquent and will begin paying off both the principal and the accrued interest

i. Check the box next to "Add Accumulated Interest to Modified Principal Balance".  This will add the Accrued Interest Amount to date to the Remaining Principal Amount.  The sum of the two will appear automatically as the Modified Remaining Loan Amount

ii. Set the Modified Terms Starting Date as today

iii. Select the First Payment Date under Modified Terms

b. Borrower has been delinquent and will begin paying off both the principal but not the accrued interest at a reduced interest rate

i. Do not check the box next to "Add Accumulated Interest to Modified Principal Balance"

ii. Click on the Edit icon next to Modified Interest Rate field to be able to change the Interest Rate to the desired level

iii. Set the Modified Terms Starting Date as today

iv. Select the First Payment Date under Modified Terms

c. Borrower intends to pay off the entire loan balance but needs future payment reduced to a certain amount

i. Check the box next to "Recalculate Schedule Given Payment Amount".  This will open a new field for entering the desired payment amount.  Please note this payment amount must be greater than the "Accrued Interest Amount"

ii. Set the Modified Terms Starting Date as today

iii. Select the First Payment Date under Modified Terms

d. Borrower can no longer pay off the entire loan balance but will pay off a portion of it

i. Click on the Edit icon next to Modified Remaining Loan Amount field to be able to change the remaining loan amount to the desired level

iii. Set the Modified Terms Starting Date as today

iv. Select the First Payment Date under Modified Terms

e. Borrower needs to change the payment frequency or the payment due date

i. Use the drop down menu next to "Modified Payment Frequency" to change payment frequency

ii. Set the Modified Terms Starting Date as today

iii. Select the First Payment Date under Modified Terms

f. Borrower needs to change the payment due date

i. Set the Modified Terms Starting Date to today

ii. Change the new First Payment Date under Modified Terms to the desired date

It is best practice to enter the decision and circumstance led to the modification in the "Notes" section.

5. Click on the "Review" button on bottom right to see the new loan payment schedule. The new pop-up with the new loan payment schedule is shown below. 

6. Click "Modify" to save the changes

After the modified terms have been saved, the borrower will receive an email notification with a summary of the terms that have been changed.  The new payment schedule for the loan on the borrower's portal and the lender's portal will switch to the new schedule, which will be followed for initiating automatic ACH payment transfers.  Lastly, a new record will appear on the Modification Log tab of the Loan Payment Schedule page as shown below.

Indicators for Loans with Modified Terms

On the Active Loans page, the "Reset History" column displays the total number of times a loan has changed its payment schedule, including "Skip the Next Payment" and "Postpone the Next Payment Due Date" and  "Modify Remaining Loan Schedule".