D.2 Posting Account Acceleration
Like any other monetary transaction, even the Account Acceleration transaction can be posted on the required account from the Customer Service > Maintenance screen. For detailed information on posting this transaction, refer to Appendix: Transaction Parameters > Monetary Transactions > Account Acceleration section.
Pre-defined validations for account acceleration
While posting the account acceleration transaction, system validates the account status with the following pre-defined validations before proceeding with the transaction:
Table D-1 Pre-defined validations
| Account Status / Transaction Description | Validations before posting transaction | Validations after posting transaction | Comments |
|---|---|---|---|
| EXTENSION | No | Should not repost after reversal | - |
| EXTENSION OVERRIDE | No | Should not repost after reversal | - |
| INDEX / MARGIN RATE CHANGE | No | Should not repost after reversal | - |
| CHANGE TERM | No | Should not repost after reversal | - |
| CHANGE BALLOON | No | Should not repost after reversal | - |
| CHANGE PAYMENT AMOUNT | No | Should not repost after reversal | - |
| DELAY FEE | No | Should not repost after reversal | - |
| CHANGE PROFIT RATE | No | Should not repost after reversal | - |
| RESCHEDULE PAYMENT | No | Should not repost after reversal | - |
| RESCHEDULE RATE | No | Should not repost after reversal | - |
| RESCHEDULE PRE-COMPUTE LOAN TO INTEREST BEARING LOAN | No | Should not repost after reversal | - |
Errors during account acceleration
Account acceleration is supported for accounts with ACTIVE status. In case account acceleration transaction is posted on accounts with any other status or if there are any other pre-existing conditions posted on the account, system does not allow to post the transaction and displays an error. The table below lists the type of errors displayed and reason for the same.
Table D-2 Errors
| Error Message | Reason |
|---|---|
| ‘Account Acceleration allowed only for Active accounts’ | The status of the account is other than ACTIVE. |
| ‘Account Acceleration already posted on account’ | There is already an account acceleration transaction posted on account. |
| ‘Account Acceleration is not allowed on Non Performing Account.’ | There is already a Non-Accrual condition posted on account (i.e., Non Performing Indicator = Y). |
| ‘Account Acceleration not allowed as Stop Accrual is active on account’ | There is already a Stop Accrual condition posted on account. |
| ‘Balance Adjustment Method applicable for Pre-Compute account’ | The Balance Adjustment method is selected for non-pre compute account since its applicable only for pre-compute accounts. |
Account changes post account acceleration
On successfully posting the account acceleration transaction, following are the account level changes:
- The acceleration effective date will be the new maturity date of the account since the original maturity date of the account is moved to either the current date or a back date.
- On an accelerated account, the periodic billing, normal interest accrual and late fee assessment is discontinued as per the standard functionality since maturity date is reached.
- From the acceleration effective date, post maturity interest accrual with corresponding post maturity interest rate is calculated and added to the total account dues as per normal processing when a monetary transaction is posted.
- For a back dated account acceleration, all the system posted transactions on the account (like billing, interest, and late fees) between acceleration date (i.e. back date) and current system date is reversed, re-calculated and re-posted based on new maturity date (i.e. acceleration date).
- Also the interest already accrued on the account based on the normal interest rate is reversed from acceleration date (i.e. back date) up to current system date.
- The same is re-calculated with post maturity interest rate and re-posted for the same period.
- For SCRA accounts, if the borrower status is OFF MILITARY DUTY during the acceleration period, then the post maturity interest rate is changed to normal interest rate for that period. In case the post maturity rate is less than standard SCRA rate (i.e. 6%), then the same is set as standard interest rate for the account.
- For an accelerated account the following account attributes are displayed in the Result section:
- Total Accelerated Payment Due Amount
- Acceleration Effective Date
- New Maturity Date
- Post Maturity Interest Rate
Transaction posting for account acceleration
Depending up on the type of loan account (i.e. pre-compute and non pre-compute), the account acceleration transaction is internally categorized and processed either in single stage or two stages.
- For Non Pre-Compute accounts the transaction is posted directly.
- For Pre-Compute accounts, the account is first converted from pre-compute to interest bearing account by internally posting the monetary transaction RESCHEDULE_PC2SI (RESCHEDULE PRE-COMPUTE LOAN TO SIMPLE INTEREST LOAN) based on the following parameter values:
- Transaction Date: Specified acceleration date
- Reschedule payment start date: Next payment date as per the existing due date history.
- Amount: Outstanding balance under ADVANCE/PRINCIPAL balance component.
- Rate: Existing normal interest rate of the account.
- Term: Calculated for the remaining term (i.e. cycles not yet billed). Term is not relevant for account acceleration since maturity date is moved to transaction date.
- Rebate on finance and insurance charges is processed as per the normal PC2SI transaction.
Refer to examples included in below section for details on how account acceleration is posted with Principle First adjustment and Interest First adjustment.
Parent topic: Appendix : Account Acceleration