Loan Category Configuration: G/L, Payment Matrix and Other Settings

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Loan Category Definition


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SEE ALSO: Printing Loan Category Configuration Information

Access this screen from the previous loan category configuration screen. Access a view-only version of this screen via F20-Loan Category while in Inquiry for a loan account.

This is the third screen used to configure loan categories. This screen includes information about the G/L interface for this loan category, payment matrix priorities, and other miscellaneous information.

When done, use Enter to continue. If using loan process type “L” (line-of-credit) one final screen will appear. For process type “V” (credit card), several more screens will appear next to allow you to configure special credit card-related settings. For all other process types, the loan category changes will be saved and the first Loan Category Definition screen will reappear.

Looking for the Electronic Checklist configuration? This is now part of the Loan Product Code configuration.  Use the Loan Product Configuration (Tool #470: Loan Product Configuration).

"Switch LOC" Automated the Switch of Interest-Only Loans to Principal/Interest Loans

Your credit union may offer a loan product where your member can open a line of credit for $5,000 and pay interest-only payments for a set number of months (for example 36). After the end of that period CU*BASE automates the "switch" of the loan, so the member begins to make payments on both the loan balance and interest. This is done using the "Switch to principal & interest pmt calc type" section on this screen.  This section only appears if the loan category is configured for a payment calculation type of "interest only" and Process type of "open line of credit" (L).  Refer to the field descriptions below and the Configuring Tools for Your Loan Team booklet for more details. NOTE:  When this change is made, all loans associated with this category, including previously created loans will change to be a "Switch LOC" type of loan.

Field Descriptions

Field Name


General Ledger Interface

These fields control how loans with this category will interface with the G/L.

Loan category

Enter the G/L asset account number where principal on this type of loan should be posted.

Interest earned

Enter the G/L income account number where earned interest for this type of loan should be posted.

Accrued interest

Enter the G/L asset account number where accrued interest for this type of loan should be posted.

Insurance Rebate

This field should be used ONLY by credit unions which utilize the Rule of 78 for calculating insurance rebate amounts. Contact a CU*BASE representative for additional information.

Student loan gov't interest

(Used with Process type “P” and “S” only.) Enter the G/L asset account number where accrued interest from student loans for the current calendar quarter should be posted.

Student loan gov't payable

(Used with Process type “P” and “S” only.) Enter the G/L asset account number where accrued interest from student loans for the previous calendar quarter should be posted (after student loan processing).

Loan category for write-offs

Enter the loan category to use when writing off the loan.

  • As of November 16, 2009, loan categories other than 99 may be configured to use when writing off a loan. For example, it may be helpful to create a separate write off loan category for credit card loans. Changes to the category affect only loans created after the change, however; is not retroactive.

Payment Matrix Priorities

The payment matrix indicates how funds should be distributed when a loan payment is made, and is used primarily when the payment is under or over the normal amount. For example, if a member's payment is short, the payment matrix can direct the system to first satisfy any delinquency fines, then the interest amount, then use any leftover funds toward principal.

Enter a sequential number (0=no funds, 1=first, 2=second, etc.) to indicate the order in which funds should be disbursed between the following:

Fine Amount

Delinquency fines which are due.

Interest Due

Interest due on the loan.


The principal on the loan.


The escrow account associated with this loan (for loan process type “L” and “M” only).

  • NOTE: In order for the system to handle escrow payments automatically, an escrow account must be linked to a loan account. A loan category which may use escrow accounts (such as Mortgages) must have its payment matrix priorities set up to include escrow accounts. If the Escrow priority is left blank or is “0,” the system ignores the escrow account and any payments to the escrow must be made manually.

  • Refer to the Escrow Processing booklet for details.

Misc. G/L

Miscellaneous funds to be paid to a G/L account, such as sales tax for lease agreements. (Also see Miscellaneous GL account, Miscellaneous GL transaction description and Misc GL amount below.)

Over payment indicator

This field indicates what should be done with extra funds, when the loan payment is higher than required.

  • NOTE: This field requires that the loan category “Next Payment date/delinq control on the previous loan category screen is set to P=Single pmt/period.

PRN Over-payment should be applied to principal.

ESC Over-payment should be applied to the escrow account (if any).

You may also enter an account type suffix, such as 000 for shares, 001 for a checking account, etc.

Miscellaneous G/L account

If you entered a priority other than zero for Misc G/L Processing, use this optional field to indicate a default G/L account number where funds should be transferred.

Misc G/L transaction description

If you entered a priority other than zero for Misc G/L, enter the transaction description to be used for the funds transferred to the miscellaneous G/L account (such as “SALES TAX PAYMENT”).

Misc G/L amount
or percent

If you entered a priority other than zero for Misc G/L, use one of these optional fields to indicate the amount that should be transferred to the G/L account whenever a payment is made:

Amount If the same amount should be transferred regardless of the payment being made (such as for a service fee), enter the exact amount here.

Percent To transfer a percentage of the total payment amount (such as for 6% sales tax on a lease loan payment), enter the percentage here (06000 = 6.000%).

Additional Information

Send 1098 tax form

Check this box for home equity loans, mortgages, and other loan types for which a 1098 tax form should be generated at year end. This does NOT apply to student loans (form 1098-E). 

This box MUST be checked prior to December 31 in order for the tax file to be created properly.  If you change the setting of this flag for any reason, please contact a CSR for assistance ensuring that all related loan accounts and tax file records are also adjusted appropriately.

  • Credit Cards: For credit cards, if this credit card program allows a link to home equity, place a checkmark here.

Add overline amount to payment

(Appears only when the Payment calculation type flag for this category was set to “I” for Interest Only.) Check this box if you want to add any amount over the loan disbursement limit to the monthly payment, when payment changes are calculated.

  • IMPORTANT NOTE: If this field is checked, the overline amount is required to advance the due date.

For use with Credit Cards

When this box is checked, the balance on the card is compared to the credit limit. If the limit has been exceeded, at statement generation that amount is added to the regular payment due to calculate the total payment due.

SEE ALSO: Credit Cards: Configuration Guide

For use with Insurance Premiums

This box is used to handle the addition of insurance premiums. Because the member isn't paying down the principal, the loan balance on these loans usually remains at the original disbursement limit. When an insurance premium is added to the loan account, it causes the account balance to go above the disbursement limit, making it appear as though the account is overline, and the amount never gets caught up until the note comes due.

If this box is checked, when the system calculates payments it will add any amount owed above the disbursement limit to the payment amount for that month. (Although the intent was primarily to handle insurance premiums, the calculation would apply in any situation where the member's balance is over the maximum disbursement limit.)

  • For example, say a $75 life and disability insurance premium is added to a loan with a disbursement limit of $12,000, bringing it to a principal balance of $12,075. The next time a payment is calculated, it will include the normal accrued interest amount, plus the $75 overline amount.

If a member makes a principal payment anywhere along the way, bringing the balance far enough below the disbursement to leave a “buffer” for future insurance premiums, the payment will no longer need to include the overline amount and may actually go down significantly.

  • For example, if the member makes a $1,000 principal payment on his $12,000 loan, bringing the principal balance down to $11,000, when future premiums are added they will no longer bring the balance above the disbursement limit, and will therefore not need to be added to the payment amount.

SEE ALSO: CU*BASE Mortgage Products: Interest Payment Only Loans

Maximum loan disbursement

Enter a whole number (no decimal digits) to indicate the maximum amount which can be disbursed with this loan category. Enter “999999999” to allow any amount.

  • For credit cards: If disbursements are allowed in audio and online banking (this is done via a transfer), the credit card system will treat them as a cash advance. You may choose a minimum and maximum disbursement amount if desired (use 1 and 999,999,999 to allow any disbursement up to the limit on the account). For credit cards loans, this is also the maximum credit limit allowed for any loan under this category.

Apply stepdown

Check this box to reduce the disbursement limit on a loan each month based on the amortization term. (Available for interest-only calc type loan categories)

The monthly “step down” amount is calculated by CU*BASE by dividing the original loan balance by the number of loan payments.  

Explanation of the stepdown loan:

Interested in adding a competitive advantage and attracting new member business loans in an ever increasing competitive marketplace?  Add another type of loan product to your arsenal – the “step-down” line-of-credit loan which combined the benefits of a long-term open-credit loan with the flexibility of a revolving line of credit. 

This type of loan product allows you to extend a line of credit and then shrink (lower) the available balance (and loan payment) incrementally each month.  For example, you might extend $10,000 for a construction project and then lower the available balance and loan payment by an incremental portion of the initial loan amount each month. 

  • You may also want to check the "Add overline amount to payment" box (see above) to handle situation where the member owes more than the new available balance when the new available balance is determined. (Refer to the Insurance premiums section for an example.)

Interest payment only loans - Scheduled payment calculation

This section is displayed when the Payment calculation type flag for this category was set to “I” for Interest Only.

Update payment on day

Use this to determine when payment amounts are updated on member loan accounts. This can be set to any valid day of the month. If “31” is entered, the system will always use the last day of the month, automatically compensating for months with less than 31 days.

  • SPECIAL NOTE FOR 360-DAY CALCULATION TYPES: If you are setting up an interest-payment-only loan that uses the 360-day calculation type, be sure to enter the day after you are using for Day to calculate interest so that payment amounts are changed after interest is calculated.  (Payments for these types of loans change during beginning-of-day processing whereas interest accrues at end-of-day processing.)

Minimum payment amount

Use this field to set the minimum payment amount that should be used regardless of the interest due on the loan. If the total amount of interest due on the update day is less than this amount, CU*BASE will use this amount as the new payment. A minimum payment is required; this field cannot be set to zero.

Next payment calculation

This tells the system when new payments should be calculated next for these loans (mmyy). This field is required when setting up a new interest-payment only loan category. This will automatically increment forward when the new payments are calculated each month.

Print payment change notices

Check this box if you wish to generate a notice showing the new payment amount each time the new payment calculation is performed. Leave it unchecked if you do not want notices.

Switch to principal & interest pmt calc type

Switch x months after month opened

Term for calculating new maturity date x months

These fields are used with the "Switch LOC" feature covered above in this topic.  This section only appears if the loan category is configured for a payment calculation type of "interest only" and Process type of "open line of credit" (L).

Check the "Switch to principal & interest pmt calc type, if you wish to automate the switch) of loans associated with the loan category) from an interest-only loan to a loan where the member pays off both the balance (principal) and interest.

  • Important note: Once this feature is activated, all loans with this loan category type will be adjusted to be "switch LOC" type loans, including previously made loans. The "switch" will happen according to the rules outlined below.

To automate the switch, enter a number of months that after the account opened to make the switch and the new term to calculate the date of the new maturity date.

Once you activate this feature, daily reports will be generated to alert you to loans that have been "switched: and loans that are exceptions.  These are covered in the booklet linked to below. (Exceptions include delinquent accounts, frozen accounts and accounts with a zero balance.  Once this is resolved, the loan will be "switched.")

At the time of the "switch," CU*BASE will automatically change the following:

  • a new payment amount will be calculated

  • the loan payment type will change from interest-only to payment and interest

  • the payment maturity date will be advanced according to this configuration

Refer to the Configuring Tools for Your Loan Team booklet for more details.

Escrow Information

This section is displayed if the Process type for this loan was set to either “L” (LOC) or “M” (mortgage).

SEE ALSO: Escrow Processing with CU*BASE

Allow tax-escrow accounts

Use this flag to control whether or not tax escrow accounts can be linked to loans of this category.

  • NOTE: If checked, be sure to assign a priority to Escrow in the Payment Matrix Priorities fields described above.

  • Refer to the Escrow Processing booklet for details.

Student Loans

This section is displayed if the Process type for this loan was set to “S” (student loans in interim) or “P” (student loans in payout) only.

Type of loan - Government or USA funds

There are two types of student loans: Government and USA. Choose one of the following codes to define the type of funds used to back the student loan:

G Government funds, such as Stafford Loans (formerly Guaranteed Student Loans), Parent Loan Supplement (PLUS), Student Loan Supplement (SLS), etc.

U USA funds, such as Perkins, National Direct Student Loans, and all government-funded loans.

Guarantee agency column/code

Choose one of the following codes to define the guarantee agency for this student loan:

A Stafford Loans (formerly Guaranteed Student Loans)

B Parent Loan Supplement (PLUS)

C Student Loan Supplement (SLS)

D Consolidation

  • A guarantee agency is a loan association who guarantees that the student is attending school and sets the loan repayment date.




Skip (F8)

Use this to cancel all changes and return to the initial screen.

End Update (F10)

Use this to save all changes and return to the initial screen.

Payment Controls (F17)

Use this to view the payment controls for the loan category.  Use this to specify how partial payments and partial escrow payments should be handled.




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