Flex Loans allows members in
It’s Me 247 to request a change in the term of their loan which results in a payment change. This is permitted on configured products with monthly payment frequencies. The loan modification request can be immediate if the member is qualified and your credit union activates auto approvals. Otherwise, the member’s request is sent to the LOS loan queue (
Tool #2 Work/View Loan Application Status) to be approved or denied by your loan officer.
While using the Flex Loans feature online, members click a plus and minus button to change the remaining number of payments for their modified loan. Then they click to see the payment change. In some cases, they member may experience that they are not presented all the terms as expected.
Following are a few reasons the member may not see all expected terms.
- In the Flex Loan configuration, your credit union can enter a minimum payment change amount $ and maximum payment change amount $ for the loan payment. They can also set a Minimum # of payments after modification xxx months and a Maximum # of payments after modification xxx months. Caution should be taken when using these minimum and maximum fields in combination. Your credit union may unintentionally restrict your member from many modification options. This is because the system calculates the available terms with both fields in mind and only presents options that fit all configuration settings.
- Loan modification requests on loans with credit life and disability insurance will only modify to the maximum insurable term. This may mean that some of the terms allowed in the configuration are not presented to the member.
- The system uses the # of payments left field to evaluate the terms it presents to the member. With loans created on CU*BASE, as the member makes monthly payments, the system recalculates this number (the NOPAYL field in MEMBER5). If the information in the NOPAYL field invalid, the member may not be presented all terms available.
Here are some reasons the NOPAYL field may have invalid data.
- A credit union employee manually edited the NOPAYL field incorrectly. This causes the system to present only terms calculated with this incorrect value.
- The NOPAYL field is incorrect because the loan was not created on CU*BASE, for example with a recently converted credit union. During the conversion, if the data on the remaining term was not available from your previous vendor, another number may be substituted, for example the full term of the loan. Depending on your credit union configuration this can be presented to the member as skipping available terms (and therefore available payment options).
Let’s use the second situation to show how incorrect data for the number of remaining payments affects the terms that are presented:
John Member is a member at XYZ Credit Union, and his remaining payments are set at 60 (the full term of his loan) instead of 12 (his actual remaining term). In addition, XYZ Credit Union also has configured a
minimum payment change amount of at least 1 cent ($0.01) in their Flex Loan configuration.
Because John has 60 in the NOPALY field, the first term John is presented for a Flex Loan modification is 60 months. If John attempts to lower his term, he will be presented a term of 11 months (to adjust for the minimum payment change allowed). If he increases his term, he will be presented a term of 61 months (again to adjust for the minimum payment change allowed).
Let’s look at what Jeff Member is missing. If Jeff Member had the correct 12 in the NOPAYL field, Jeff would start at a term of 12 months and move downward to 11 months, just as he would in the previous example. However, if Jeff increased his term, he would advance to a term of 13 months (a minimum of 1 cent greater).
With the incorrect remaining term, Jeff is never presented the range of terms from 13 months to the greatest payment (or term) change allowed (or 59 months, whichever is lower).