Process Loan Foreclosure and Prepayment

Woodcore enables you offer your customers the flexibility to repay their loans prior to the scheduled maturity date. There are two types of early repayment options available:

1. Foreclosure: This option allows customers to repay the entire loan amount in full before the designated maturity date. By opting for foreclosure, your customers can settle their outstanding debt entirely, including any accrued interest or fees.
2. Prepayment: Prepayment refers to early repayment made in parts or installments. Your customers have the opportunity to pay off a portion of their loan balance ahead of schedule.

Through these options, customers can settle their loans, including the principal amount and accused interest, ahead of schedule, either partially or completely. Once the payment is complete, the loan account will be closed.

To prepay a loan, follow the steps below:

• On the Active loan account, click on the Take Action button.

• Select “Prepay Loan” from the modal list.

• Select payment method. We recommend using “Link savings account” as the payment method. Selecting this option will enable journal entries to be automatically recorded.

• Enter the amount to be pre-paid in the “Transaction Amount” field.

• Click the “Next” button to prepay a loan.

To Foreclose a loan

• On the Active loan account, click on the Take Action button.

• Select “Foreclosure” from the modal list.

• Select payment method. We recommend using “Link savings account” as the payment method. Selecting this option will enable journal entries to be automatically recorded.

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Loan foreclosure requires paying the entire loan amount in advance, which means that you are unable to modify the transaction amount field.

• Enter the loan narration

• Click the “Next” button to process the loan foreclosure.