An administration fee is a fixed fee amount that is applied to each payment period during the lifetime of the revolving credit, regardless of whether or not the borrower has withdrawn any money.
Administration Fee Example:
An administration fee of € 20 means a minimum of € 20 will be expected to be paid by the borrower every payment period until the final drawdown date. If the borrower has withdrawn money from the revolving credit, then the administration fee will be added on top of their repayment amount.
- Administration fees can be removed from the loan using the normal ‘Remove cost’ process.
- Any changes to the final drawdown date of the revolving credit will also change the administration fee.
From the Loan 360° overview page of a revolving credit, by clicking on the ‘Actions’ button in the top right corner and selecting ‘Administration fee', you can add an administration fee to the loan.
Once that is selected, you will have to fill out a few properties related to the administration fee, as described below.
This is the date from which the administration fee will be applied. The default effective date will be the first payment date of the loan, but can be changed to any date greater than the issue date of the loan.
If you set the effective date to a date that does not align with the billing cycle of the loan, then the administration fee will have a different payment recurrence from the repayments of any drawdowns. For example, if you set the effective date to the 10th of the month, but the first payment date of the loan is the 15th, then the administration fee will always be due on the 10th, but any future drawdowns will be expected to be repaid on the 15th (See Create Revolving Credit for more information on the first payment date/billing cycle).
This is the fixed fee amount that will be added to every payment period of the loan up until the final drawdown date. This fixed amount will be expected to be paid by the borrower, regardless of whether or not they have done a drawdown.
After inputting the details, you will have to review the details on a summary page, then confirm the change.
Depending on the configuration of the ‘Administration Fee’ process in the Configuration Portal , once the changes are confirmed, they will either be implemented immediately, or an approval task will be created where a second user needs to confirm the changes. More information on the approval tasks can be found under Task Management .
The new administration fee on the revolving credit will be visible on the Loan 360° page under ‘Cashflows’.
Updated over 1 year ago