1. Lease Origination Setup Guide
  2. Product
  3. Promotions

4.20 Promotions

The Introductory tab of Promotions screen allows you to set up the promotions that a financial institution can offer its customers. Promotion details defined here can be selected during Application Entry and Application processing.

You can define multiple promotions for a product, then select the appropriate promotion at the time the application is processed. Promotions also serve as a selection criteria on the Pricing screen.

CAUTION: The system supports promotions selected only when a product is funded.

Note:

Promotions will only be supported for Interest Rate type of lease calculation method.

Same as Cash promotions

In the case of the same as cash promotion:
  • If the outstanding amount at the end of the promotional period is within the tolerance amount, then the customer receives the full benefit of the promotion and the system will not charge any interest on the borrowers’ account.
  • If the outstanding amount is higher than the authorized tolerance amount, then the customer loses the benefit of the promotion and the system computes and charges the borrower interest from the date the product was funded.

Interest & Payments

Interest still continues to accrue for a account that is funded using the SAME AS CASH promotion. However, the interest accrued during the promotion period is not charged or collected on the account until the end of the promotion period.

Any repayment made by the customer during the promotion period is applied towards the lease receivables amount. The system then calculates the interest accrual using the reduced lease receivables amount, if applicable.

If the product remains unpaid after the end of the promotion period and the lease receivables balance is above any stated tolerance amount, then the system starts collecting interest earned and accrued during the promotion period.

Reduced Rate Introductory Promotions

Oracle Financial Services Lending and Leasing’s promotion method PROMOTIONAL RATE allows you to create and specify promotions where customers can be charged lower interest rates during a specific promotional period of time. You may define the length of the promotion in either terms or days. Also, you will be able to set the specific interest rate you want to attach to the promotion. During the promotional period, interest on an account is accrued at the promotional rate. When the promotional period expires, the system changes the interest rate of the product to the contractual interest rate to accrue interest. The promotion expires on the promotion end date defined by the length of the promotion. However, the system allows you to set a grace period for extending the automatic cancellation of the promotion due to delinquency, similar to the grace period associated with a payment date.

To set up the Lease Introductory
  1. On the Oracle Financial Services Lending and Leasing home screen, click Setup > Setup > Administration > User > Products > Promotions > Lease Introductory.
  2. In the Promotion Definitions section, perform any of the Basic Operations mentioned in Navigation chapter.

    Figure 4-22 Promotions-Lease Introductory


    Description of Figure 4-22 follows
    Description of "Figure 4-22 Promotions-Lease Introductory"

    A brief description of the fields is given below:

    Table 4-59 Promotion Definitions

    Field Do this
    Code Specify the code identifying the promotion.
    Description Specify a description of the promotion being offered.
    Type Select the promotion type from the drop-down list.
    Period Type

    Select the period type from the drop-down list.

    Note: Select PROMOTIONAL DAYS, if the length of the promotion is to be measured in days. Select PROMOTION TERM, if the length of the promotion is more accurately measured in terms.

    Period Specify the specific promotion period. If you have selected PROMOTIONAL DAYS in the Period Type field, then enter the number of days of the promotion period duration. If you selected PROMOTION TERM, then enter the number of terms for which the promotion applies. Remember that the system uses the same length of the term increment that is used in the billing cycle for the Lease; for example, weekly, monthly, semi-annual, or annual.
    Tolerance Amt

    Specify the dollar amount of the allowed tolerance, if applicable. This is the amount that can be outstanding at the end of the promotion period.

    Note: This applies only to the promotion type SAME AS CASH.

    Index Select the promotional index rate from the drop-down list.
    Margin Specify the promotional margin rate.
    Cancel Delq Days Specify the tolerance days for the promotion cancellation due to delinquency.
    Enabled Check this box to enable the promotion.
    Lease Calc Method The lease calculation method is selected as INTEREST RATE on save since lease promotion is applicable only for Interest Rate type of calculation method.
  3. Perform any of the Basic Actions mentioned in Navigation chapter.

Parent topic: Product