Defer a Transaction

In Fairways Debt, you can defer a transaction: postpone its payments and interest for a specific period.

Note: You can defer payments of:

  • Standard loans
  • Leases (with no downpayments)

 

Prerequisites
  1. Create a standard loan
  2. Create a lease

 

Navigate to the Debt & Derivatives Application
  1. Log in to your Fairways Debt account, e.g. https://login.financeactive.com/eu.
  2. Select a customer account.
  3. Navigate to Applications > Debt & Derivatives.

 

Defer a Transaction
  1. Open a standard loan or a lease.

Portfolio_EN.png

  1. Navigate to Life Cycle.
  2. Click Add Deferment Period.

Transaction_LifeCycle_EN.png

  1. Complete the form with all relevant details.

Note: Fields marked with an asterisk * are mandatory.

Field

Description

Trade Date

Date at which the deferment has been agreed.

Note: The deferment trade date must be equal or later than the original transaction trade date.

Deferment Start Date

Unadjusted start date of the deferment period.

Note: The start date must be equal or later than the trade date.

Deferment End Date

Unadjusted end date of the deferment period.

Note: The end date must be later than the start date.

DefermentPeriodDates_EN.png

Field

Description

Rule Type

Note: Different rule configurations display for different transaction types.

For transactions with a bullet, straight-line, or custom amortization: Simple rules apply the current most popular amortization and interest choices. Select Advanced to configure other rules.

Amortization

Note: This field only displays for transactions with a bullet, straight-line, or custom amortization.

Impacts the initial maturity date of the transaction:

  1. New maturity date: The deferment period shifts the initial maturity date, taking into account the deferment period duration.
  2. Initial maturity date: The deferment period does not change the maturity date selected in the transaction profile.

Interest

Note: This field only displays for transactions with a bullet, straight-line, or custom amortization with an advanced rule type.

Impacts the payment amounts in the transaction schedule:

  1. Keep paying: The interest should still be paid during the deferment period.
  2. Pay accrued interest on next payment: The interest is not paid during the deferment period, but all the deferred interest should be paid on the next payment date.
  3. Capitalize: The interest is not paid during the deferment period, but all the deferred interest adds up to the outstanding balance.

Index

Note: This field only displays for standard loans with constant annuities.

Name of the index used to calculate the rate value, e.g. FIXED for a fixed rate.

Interest Rate

Note: This field only displays for standard loans with constant annuities.

Fixed rate value in percentage.

Day Count Convention

Note: This field only displays for standard loans with constant annuities.

Used to compute the day fraction of an interest accrual period.

Rent

Note: This field only displays for leases with constant annuities.

Rent value.

Last Rent

Note: This field only displays for leases with constant annuities.

Value of the last rent, if different from the rent value.

DefermentRules_EN.png

  1. Click Apply.

Defer_EN.png

The deferment period is added to the transaction...

Deferred_EN.png

... and applies to the transaction schedule.

Deferred_2_EN.png

Note: You can add multiple deferment periods to a transaction, but these deferment periods cannot overlap one another.

 

Examples

A standard loan with:

  • Principal: 7 000 000 EUR
  • Start date: 1 January 2020
  • Maturity date: 1 August 2020
  • Amortization type: Straight line
  • Frequency: Monthly

Schedule_EN.png

 

Initial maturity date while keeping paying the interest:

  • The maturity date does not change.
  • The interest of April and May should still be paid.

Same_EN.png

 

New maturity date while keeping paying the interest:

  • As the deferment period lasts two months (April and May), two months are added to the initial maturity date, moving it from August to October.
  • The interest of April and May should still be paid.

New_KeepPaying_EN.png

 

New maturity date with the accrued interest paid on the payment after the deferment period:

  • As the deferment period lasts two months (April and May), two months are added to the initial maturity date, moving it from August to October.
  • The interest of April and May is not paid during the deferment period but should be paid on the next payment date, June.

New_PayNextPayment_EN.png

 

New maturity date while capitalizing the interest:

  • As the deferment period lasts two months (April and May), two months are added to the initial maturity date, moving it from August to October.
  • The interest of April and May is not paid during the deferment period but add up to the outstanding balance.

New_Capitalize_EN.png

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