1. Lease Origination Setup Guide
  2. Product
  3. Index Rates

4.2 Index Rates

The Index Rates screen maintains your organization’s history of periodic changes in index rates. It allows you to define index rates to support variable rate lines of credit. The index rate provides the base rate for a credit line where:

interest rate = index rate + margin rate.
The Index section displays the currently defined indexes on the Lookups screen. You may create additional user-defined lookup codes for this lookup type as needed.

Note:

You cannot tie an index rate to a product rate.

You can also record any index rate change on the Index Rates screen. During nightly batch processing, all the accounts with that index type are included when posting the RATE CHANGE transaction. After the system processes the batch, the interest rate of the account is changed. The system will use this new interest rate when computing all future interest calculations.

To set up Index Rates
  1. Click Setup > Setup > Products > Index Rates.
  2. In the Index section, perform any of the Basic Operations mentioned in Navigation chapter.:

    Figure 4-2 Index Rates


    Description of Figure 4-2 follows
    Description of "Figure 4-2 Index Rates"

  3. A brief description of the fields is given below:

    Table 4-9 Index

    Field Do this
    Index Type Select the type of index from the drop-down list.
    Short Description Specify a short description of the index.
    Description Specify the index description.
    Enabled Check this box to activate the index type.
  4. Perform any of the Basic Actions mentioned in Navigation chapter.
    The Index Details section allows you to define multiple index values using the Start Dt and Rate fields.

    Note:

    The history appears in descending order, with the most current record at the top.
  5. In the Index Details section, perform any of the Basic Operations mentioned in Navigation chapter.
    A brief description of the fields is given below:

    Table 4-10 Index Details

    Field Do this
    Start Dt Specify the effective start date for the index rate. You can even select the date from the adjoining Calendar icon.
    Rate

    Specify the new index rate effective from above mentioned date as a percentage.

    Note: For the FLAT RATE index there should be only one entry with a Start Dt. = 01/01/1900 and a RATE = 0.0000.

    Enabled Check this box to activate the index rate effective from start date mentioned above.
  6. Perform any of the Basic Actions mentioned in Navigation chapter.

    Note:

    Variable rate functionality is not extended to pre-compute accounts.

Parent topic: Product