SaFi Bank Space : Allocation of funds

In case of clients with personal loans and overdraft loan product, there a preset sequence for allocation of available funds towards their debts.

Sequence of debiting the accounts

Priority on product level:

Components order of repayment
Sum of all Late fees charges for overdue personal loan amount
2. In the order of oldest to newest debt:
2.1. Overdue Interest belonging to unpaid instalments
2.2 Overdue Principal belonging to unpaid instalments
3. Current due amounts, if any:
3.1. Due interest
3.2. Due principal

Components order of repayment

Example of funds allocated in case of an overdue Personal Loan

customer with a personal loan 100p monthly instalment, and overdue for 3 months. The repayment history looks like this:

Date	Interest	Principal	Monthly payment (sum)	Status
01-May	30	70	100	PAID
01-Jun	29	71	100	PAID
01-Jul	28	72	100	OVERDUE
Late fee			10
01-Aug	27	73	100	OVERDUE
Late fee			15
01-Sept	26	74	100	OVERDUE
Late fee			15
01-Oct	25	75	100
01-Nov	24	76	100

The client is in debt 100+10+100+15+100+15 = 340 p

The client has on 20-Sept on his account new money, in amount of 125 p.

The money will be allocated like this:

Sum of All Late fees: 40 p → 125-40=85 p
Then, in the order of “OLDEST debt FIRST” → 01-Jul. and will cover in the order of components:
1. interest 28p → 85-28=57 p
2. principal 72p → 72-57 = 15p will still be overdue.

The repayment plan will look like this:

Date	Interest	Principal	Monthly payment (sum)	Status
01-May	30	70	100	PAID
01-Jun	29	71	100	PAID
01-Jul	28	15 57	15 85	OVERDUE PAID
Late fee			10	PAID
01-Aug	27	73	100	OVERDUE
Late fee			15	PAID
01-Sept	26	74	100	OVERDUE
Late fee			15	PAID
01-Oct	25	75	100
01-Nov	24	76	100

The client is now 15+100+100 overdue = 215 p

The values of the late fees and components of the instalment plan are just for informative reason.