Start date and first payment date of the finance agreement

Start date and first payment date of the finance agreement

The start date and the first payment date of an application can change during the life cycle of the application. This is due to a number of unknown factors such as:

  • The borrower starts an application online, but we have no way on knowing how long it will take the borrower to complete the application and submit it for credit assessment. The borrower can save the application and come back at any stage to complete it.
  • Once the supplication has been submitted for credit assessment, we have not way of knowing how long it will take the credit department to collect documents and assess the application
  • Investors will need to bid on the application in order to fund it. They have the duration of the listing period to do this and it could take any number of days of the listing period to fully fund the application.
  • Once fully funded the borrower will need to complete the online signing of the application, known as the confirmation of the application. We don’t know how many days it will take the borrower to complete this process.

There are a number of settings and business rules that can assist the finance company in setting the start date and the first payment date.

  • “Finance applications via market” setting on the “Product Settings” business rule for the originator group product
  • “Listing Period” – the duration of the listing / application. When a borrower creates a listing / application, once the application is approved and it becomes available for bidding, it will remain open for bidding until the listing period has been reached
  • “Estimated approval days” setting on the “Listings and Application” business rule for the originator group product.
  • “Confirmation period” setting on the “Listings and Application” business rule for the originator group product.
  • “Online application offer confirmation required” setting on the “Listings and Application” business rule for the originator group product.
  •  “First Payment Date” setting on the “Listings and Application” business rule for the originator group product
  • “Start Date Set” , use the “start date set to” value on the application and only if it is null on the application then use the setting on the “Listings and Application” business rule for the originator group product
  • “Minimum Days First Payment From Start Date” setting on the “Listings and Application” business rule for the originator group product
  • “Max Month First Payment From Start” setting on the “Listings and Application” business rule for the originator group product.
  • “Working day adjustment” setting on the finance company calendar
  • "Attempt To Align All Borrower Payments" setting on the “Listings and Application” business rule for the originator group product. If selected the first payment date and start date of the application will use the rules as supplied but will also attempt to align so that all the borrower’s repayments fall on the same day. This will not always be possible due to the different repayment frequencies but it will be attempted as best possible. 
Example : application has repayment frequency of monthly, “Start Date Set” rule is set to “At listing confirmation”, “First Payment Date “ rule is set to “in advance”. The borrower has an existing finance agreement with repayment frequency of “fortnightly” and the list of future instalments is

8 Jan 2020
22 Jan 2020
5 Feb 2020
19 Feb 2020
2 March 2020

At confirmation the start date was set to 1 Jan 2020 which means the first payment date would have been 1 Jan 2020, but as a result of the “Attempt to Align Borrower Repayments” business rule being true the start date will need to be adjusted so that the first payment date falls on an instalment date of the existing finance agreement. The start date will thus be adjusted to: 

8 Jan 2020 as then the first payment date will be 8 Jan 2020 (as rules is set to in advance) which is the same day as an existing instalment from the existing finance agreement.

If using the same example except “First Payment Date “ rule is set to “in arrears”. The start date will thus be adjusted to:
5 Jan 2020 as then the first payment date will be 5 Feb 2020 which is the same day as an existing instalment from the existing finance agreement.

However keep in mind that if this date is a public holiday or weekend and the business rules are setup to adjust as per below then this could be altered and prevent the alignment of dates.


The start date and first payment date will be determined using the below rules and will adjust automatically where applicable as the application progresses through the steps:

Start Date

Step 1: Application Pages - when an application is created or edited when the status of the application is "created"

Listing start date and closing Date
  1. The “listing start date” is set to the date the listing is created
  2. The “listing closing date” is set to the “listing start date”  + “estimated approval days” + “listing period” as we are trying to get the listing close date i.e. the date the listing will be cancelled as accurate as possible to the date from which investors can fund.

 

Start Date
Rule
  1. If the “Start Date Set” business rule setting is set to “At listing origination” the start date is set to current date + listing period + 1
  2. If the “Start Date Set” business rule setting is set to “At listing confirmation” or “At listing finalisation”
    1. If the “online application offer confirmation required” business rule setting is set to TRUE , the start date is set to current date + listing period + estimated approval days + the confirmation period + 1.
    2. If the “online application offer confirmation required” business rule setting is set to FALSE, the start date is set to current date + listing period + estimated approval days + 1
In both the above rules, If the “Attempt to Align Borrower Repayments” business rule setting is set to true AND the borrower has existing finance agreements , the start date will need to be adjusted in order for the first payment date to fall on the same day as the next possible instalment date of the most recent finance agreement the borrower has. If the borrower does not have any finance agreements then the most recent application will be used. When determining the repayments of other finance agreements the public holidays are taken into account to ensure all future payments occur on the same date.

  1. If the borrower supplies a start date i.e. on application page or through public API then that start date supplied will be used regardless of the start date calculation rules. The start date alignment will however take place if the rule is set to align.
  2. If the borrower however does not supply a start date i.e. on application page or through public API the start date will default to the start date calculation rule above.
  3. If the “Start Date Set” business rule setting is set to “At listing origination” and the start date <= trading date
    1. If the “Retain start date” value on the application is set to “False”  then the start date will be reset to the start date calculation rule / calculation above.
    2. If the “Retain start date” value on the application is set to “True” the start date will be left at whatever is supplied. This allows for backdated finance agreements to be created.
  4. If the “First Payment Date” business rule setting is set to “In advance or arrears” and “advance” has been selected and the start date is made the same as the first payment date and the first payment falls on a weekend or a public holiday, and the "working day adjustment” is set to “previous working day”, the scenario could result in the first non-zero payment date being before the start date. This is not possible and in this scenario the start date will be moved to be the same as the first non-zero payment date.
  5. When the start date is moved or adjusted in these instances, if the “duration of finance agreement determined by” rule on the listing and application business rule on the originator group product is set to “Settlement Date”, the settlement date will not be adjusted, but instead the term adjusted when the start date moves.

 

 

Step 2: Listing status CHANGES to “Posted”

Listing start date and closing Date
  1. The “listing start date” is reset to the current date.
  2. The “listing closing date” is reset to the “listing posted date”  + “estimated approval days” + “listing period”  as we are trying to get the listing close date i.e. the date the listing will be cancelled as accurate as possible to the date from which investors can fund.


Start Date 
Rule
  1. If the “Start Date Set” business rule setting is set to “At listing origination” the start date is set to current date (posted date) + 1
  2. If the “Start Date Set” business rule setting is set to “At listing confirmation”  or “At listing finalisation” 
    1. If the “online application offer confirmation required” business rule setting is set to TRUE , the start date is set to current date + listing period + estimated approval days + the confirmation period + 1.
    2. If the “online application offer confirmation required” business rule setting is set to FALSE, the start date is set to current date + listing period + estimated approval days + 1
In both the above rules, If the “Attempt to Align Borrower Repayments” business rule setting is set to true AND the borrower has existing finance agreements , the start date will need to be adjusted in order for the first payment date to fall on the same day as the next possible instalment date of the most recent finance agreement the borrower has. If the borrower does not have any finance agreements then the most recent application will be used. When determining the repayments of other finance agreements the public holidays are taken into account to ensure all future payments occur on the same date.

  1. If the borrower did supply a start date i.e. on application page or through public API then that start date supplied will be used regardless of the start date calculation rules. The start date alignment will however take place if the rule is set to align.
  2. If the borrower however did not supply a start date i.e. on application page or through public API the start date will be reset to the start date rule / calculation above.
  3. If the “Start Date Set” business rule setting is set to “At listing origination” and the start date <= trading date
    1. If the “Retain start date” value on the application is set to “False”  then the start date will be reset to the start date calculation rule / calculation above.
    2. If the “Retain start date” value on the application is set to “True” the start date will be left at whatever is supplied. This allows for backdated finance agreements to be created.
  4. If the “First Payment Date” business rule setting is set to “In advance or arrears” and “advance” has been selected and the start date is made the same as the first payment date and the first payment falls on a weekend or a public holiday, and the "working day adjustment” is set to “previous working day”, the scenario could result in the first non-zero payment date being before the start date. This is not possible and in this scenario the start date will be moved to be the same as the first non-zero payment date.
  5. When the start date is moved or adjusted in these instances, if the “duration of finance agreement determined by” rule on the listing and application business rule on the originator group product is set to “Settlement Date”, the settlement date must not be adjusted, but instead the term adjusted when the start date moves.

Step 3: Listing status CHANGES to “Applied” or "Assess"

Listing start date and closing Date
  1. The “listing start date” is reset to the current date.
  2. The “listing closing date” is reset to the “listing posted date”  + “estimated approval days” + “listing period” as we are trying to get the listing close date i.e. the date the listing will be cancelled as accurate as possible to the date from which investors can fund.

Start Date 
Rule
  1. If the “Start Date Set” business rule setting is set to “At listing confirmation” or “At listing finalisation”
    1. If the “online application offer confirmation required” business rule setting is set to TRUE , the start date is set to current date + listing period + estimated approval days + the confirmation period + 1.
    2. If the “online application offer confirmation required” business rule setting is set to FALSE, the start date is set to current date + listing period + estimated approval days + 1
In both the above rules, If the “Attempt to Align Borrower Repayments” business rule setting is set to true AND the borrower has existing finance agreements , the start date will need to be adjusted in order for the first payment date to fall on the same day as the next possible instalment date of the most recent finance agreement the borrower has. If the borrower does not have any finance agreements then the most recent application will be used. When determining the repayments of other finance agreements the public holidays are taken into account to ensure all future payments occur on the same date.

  1. If the “Start Date Set” business rule setting is set to “At listing origination”, the start date will not be adjusted when the listing is approved, as it will use the start date set that exists on the application that was set at origination i.e. when the listing / application was posted.
  2. If the “Start Date Set” business rule setting is NOT set to “At listing origination” i.e. the “Start Date Set” business rule setting is set to “At listing finalisation”, or “At listing confirmation” the start date will be reset to the “start date rule / calculation”.
  3. If the “First Payment Date” business rule setting is set to “In advance or arrears” and “advance” has been selected and the start date is made the same as the first payment date and the first payment falls on a weekend or a public holiday, and the "working day adjustment” is set to “previous working day”, the scenario could result in the first non-zero payment date being before the start date. This is not possible and in this scenario the start date will be moved to be the same as the first non-zero payment date.
  4. When the start date is moved or adjusted in these instances, if the “duration of finance agreement determined by” rule on the listing and application business rule on the originator group product is set to “Settlement Date”, the settlement date must not be adjusted, but instead the term adjusted when the start date moves.

Step 4: Application status CHANGES to "Approved"

Listing start date and closing Date
  1. The “listing start date” is reset to the current date.
  2. The “listing closing date” is reset to the “listing approved date”  +  “listing period” as we are trying to get the listing close date i.e. the date the listing will be cancelled as accurate as possible to the date from which investors can fund.
      
Start Date
Rule
  1. If the “Start Date Set” business rule setting is set to “At listing confirmation” or “At listing finalisation”
    1. If the “online application offer confirmation required” business rule setting is set to TRUE , the start date is set to current date + listing period + the confirmation period + 1.
    2. If the “online application offer confirmation required” business rule setting is set to FALSE, the start date is set to current date + listing period + 1
In both the above rules, If the “Attempt to Align Borrower Repayments” business rule setting is set to true AND the borrower has existing finance agreements , the start date will need to be adjusted in order for the first payment date to fall on the same day as the next possible instalment date of the most recent finance agreement the borrower has. If the borrower does not have any finance agreements then the most recent application will be used. When determining the repayments of other finance agreements the public holidays are taken into account to ensure all future payments occur on the same date.

  1. If the “Start Date Set” business rule setting is set to “At listing origination”, the start date will not be adjusted when the listing is approved, as it will use the start date set that exists on the application that was set at origination i.e. when the listing /application was posted.
  2. If the “Start Date Set” business rule setting is set to “At listing origination”, the start date will not be adjusted when the listing is finalised, as it will use the start date set that exists on the application that was set at origination i.e. when the listing/application was posted.
  3. If the “Start Date Set” business rule setting is NOT set to “At listing origination” i.e. the “Start Date Set” business rule setting is set to “At listing finalisation”, or “At listing confirmation” the start date will be reset to the “start date rule / calculation”.
  4. If the “First Payment Date” business rule setting is set to “In advance or arrears” and “advance” has been selected and the start date is made the same as the first payment date and the first payment falls on a weekend or a public holiday, and the "working day adjustment” is set to “previous working day”, the scenario could result in the first non-zero payment date being before the start date. This is not possible and in this scenario the start date will be moved to be the same as the first non-zero payment date.
  5.  When the start date is moved or adjusted in these instances, if the “duration of finance agreement determined by” rule on the listing and application business rule on the originator group product is set to “Settlement Date”, the settlement date must not be adjusted, but instead the term adjusted when the start date moves.

 


Step 5: Listing status CHANGES to “awaiting confirmation” 

Start Date
Rule
  1. If the “Start Date Set” business rule setting is set to “At listing confirmation”  or “At listing finalisation”
    1. If the “online application offer confirmation required” business rule setting is set to TRUE , the start date is set to current date +  the confirmation period + 1.
    2. If the “online application offer confirmation required” business rule setting is set to FALSE, the start date is set to current date +  1
In both the above rules, If the “Attempt to Align Borrower Repayments” business rule setting is set to true AND the borrower has existing finance agreements , the start date will need to be adjusted in order for the first payment date to fall on the same day as the next possible instalment date of the most recent finance agreement the borrower has. If the borrower does not have any finance agreements then the most recent application will be used. When determining the repayments of other finance agreements the public holidays are taken into account to ensure all future payments occur on the same date.

  

  1. If the “Start Date Set” business rule setting is set to “At listing origination”, the start date will not be adjusted when the listing is approved, as it will use the start date set that exists on the application that was set at origination i.e. when the listing /application was posted.
  2. If the “Start Date Set” business rule setting is NOT set to “At listing origination” i.e. the “Start Date Set” business rule setting is set to “At listing finalisation”, or “At listing confirmation” the start date will be reset to the “start date rule / calculation”.
  3. When the start date is moved or adjusted in these instances, if the “duration of finance agreement determined by” rule on the listing and application business rule on the originator group product is set to “Settlement Date”, the settlement date must not be adjusted, but instead the term adjusted when the start date moves.
  4. If the “First Payment Date” business rule setting is set to “In advance or arrears” and “advance” has been selected and the start date is made the same as the first payment date and the first payment falls on a weekend or a public holiday, and the "working day adjustment” is set to “previous working day”, the scenario could result in the first non-zero payment date being before the start date. This is not possible and in this scenario the start date will be moved to be the same as the first non-zero payment date.

 


Step 6: Listing status CHANGES to “Finalised”

Start Date
  1. If the “Start Date Set” business rule setting is set to “At listing confirmation”, the start date of the application will be adjusted to be the current date the listing is confirmed plus 1 (so it will be set to the next day) and start date alignment will take place if the rule is set to align.
  2.  If the “Start Date Set” business rule setting is set to “At listing finalisation”, the start date will not be adjusted when the listing is confirmed, as it will use the start date set at the time the listing was finalised.
  3. If the “Start Date Set” business rule setting is set to “At listing origination”, the start date will not be adjusted when the listing is confirmed, as it will use the start date set at the time the listing was originated i.e. when the listing /application was posted.
  4. If the “First Payment Date” business rule setting is set to “In advance or arrears” and “advance” has been selected and the start date is made the same as the first payment date and the first payment falls on a weekend or a public holiday, and the "working day adjustment” is set to “previous working day”, the scenario could result in the first non-zero payment date being before the start date. This is not possible and in this scenario the start date will be moved to be the same as the first non-zero payment date.
  5. When the start date is moved or adjusted in these instances, if the “duration of finance agreement determined by” rule on the listing and application business rule on the originator group product is set to “Settlement Date”, the settlement date must not be adjusted, but instead the term adjusted when the start date moves.

 

 

Manually purchase an application in Clearmatch  Fusion

Start Date

  1.  When manually purchasing an application , the start date will be the date purchased and supplied on the page regardless of the “Start Date Set” business rule .
  2. If the “First Payment Date” business rule setting is set to “In advance or arrears” and “advance” has been selected and the start date is made the same as the first payment date and the first payment falls on a weekend or a public holiday, and the "working day adjustment” is set to “previous working day”, the scenario could result in the first non-zero payment date being before the start date. This is not possible and in this scenario the start date will be moved to be the same as the first non-zero payment date.
  3. When the start date is moved or adjusted in these instances, if the “duration of finance agreement determined by” rule on the listing and application business rule on the originator group product is set to “Settlement Date”, the settlement date must not be adjusted, but instead the term adjusted when the start date moves.

 


First Payment Date
The first payment date is always adjusted the same way in all the steps mentioned above when the start date changes i.e.
  1. If the “duration of finance agreement determined by” rule on the listing and application business rule on the originator group product is set to “Settlement Date”, the first payment date can never be supplied and is calculated by taking the settlement date and applying the payment frequency backwards. The repayment frequency will continually be applied until it is within the start date of the application.
  2. If the “First Payment Date” business rule setting is set to “In advance or arrears” and “advance” has been selected the first payment date will be the start date.
  3. If the “First Payment Date” business rule setting is set to “In advance or arrears” and “arrears” has been selected the first payment date will be the next period (repayment frequency) following the start date.
  4. If the “First Payment Date” business rule setting is set to “Based on Listing Duration and Estimated Approval Days” and the customer or a staff member has NOT entered or modified the first payment date on the application pages the first payment date will be reset to Start date + the payment frequency.
  5. If the “First Payment Date” business rule setting is set to “Based on Listing Duration and Estimated Approval Days” and the customer or a staff member has entered or modified the first payment date on the application pages
    1. If the first payment date is less than start date plus “First Payment Day Period” business rule setting. The first payment date will be reset to (First payment date + repayment  frequency) until it is greater than the start date plus “First Payment Day Period"
    2. If the first payment date > start date plus “Max Month First Payment From Start” business rule setting. The first payment date is moved back to Start date + “Max Month First Payment From Start”
  1. When instalments are processed by the platform, if a payment falls on a weekend or a public holiday that the banks do not process transactions
    1. The payment will be moved to the first working day prior if the “working day adjustment” setting is set to “previous working day”.If the “First Payment Date” business rule setting is set to “In advance or arrears” and “advance” has been selected and the start date is made the same as the first payment date and the first payment falls on a weekend or a public holiday, and the "working day adjustment” is set to “previous working day”, the scenario could result in the first non-zero payment date being before the start date. This is not possible and in this scenario the start date will be moved to be the same as the first non-zero payment date
    2. The payment will be moved to the first working day after if the “working day adjustment” setting is set to “next working day”.




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