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Life of a Loan Explanation

You will learn how Bravo tracks the full life of a loan, from origination to payoff or forfeiture, including renewals, payments, and status changes.

 

Standard Loan

A standard loan consists of several parts. The Pawn Term, Grace Period, and Hold Period.

 

Glossary

Original Loan Date – The day an item is brought in to be pawned    

 

Principal Loan Amount – The total dollar amount loaned to the customer for the item

 

Pawn Term – The original agreed duration of a loan. Consists of several Pawn Interest Periods

  • Pawn Interest Periods – An increment of time where interests & fees are assessed (Ex. 30 days)
  • NOTE: The number of Pawn Interest Periods is defined by you when writing a loan (Ex. 90 days)

 

Maturity Date – The final due date of a loan. (This changes if an Extension or Partial Payment is made)

 

Pawn Grace Period – A period after Maturity Date where a payment can still be made (Ex. 7 days)

  • NOTE: After the Grace Period, if a loan is unpaid, it will appear in “Loans Requiring Notices” on the Bravo Dashboard. Then you can notify the customer, and it will return to your Active Loans

 

Date to Send Loan Notice –A notice will be sent on this day, reminding the customer to make a payment

 

Loan Notice Hold Period – If no payment is made after the Loan Notice, item will be held for this long…

  • NOTE: After the Hold Period, if a loan is unpaid, it will appear in “Loans to Expire” on the Bravo Dashboard because the Pull Date has been reached. You can then expire the loan, and it will appear in “Items Waiting to be Priced”

Default Date - The day before the Pull Date. This will include the Pawn Term, Grace Period & Notice Period. The only guaranteed one of these is the Pawn Term. A store can have a Default Date that is the same as the Maturity Date if they do not have a Grace or Notice Period.

Pull Date – The day you can expire a loan and price the item to be added to active inventory

 

Extensions/Partial Payments -AND- Renewals

There are a few different ways a standard Loan can be “extended” or “renewed”

  • Extensions / Partial Payments
    • Extensions – Customer may choose to pay interest & fees in advance to extend.
    • Partial Payments – Payments made in excess of interest & fees pay the Principal
  • Renewals
    • Normal Renewals – If all Pawn Term interest & fees are paid, new Loan is created with the current day as the Loan Date.
    • End of Final Period – If all Pawn Term interest & fees are paid, new Loan is created with the final day of the final period

Extensions

When a customer makes a payment (ex. $30) that covers the interest & fees (ex. $10) for a Pawn Interest Period, any EXCESS (ex. $20) will be applied to the NEXT Pawn Interest Period’s interest & fees.

Maturity date, Pawn Grace Period, and Loan Hold Notice Period will be delayed accordingly.

Example: If the interest & fees for each period is $10 and the customer wishes to get an extension of 3 Pawn Interest Periods, they can simply make a payment of $30.

 

Partial Payments

When a customer makes a payment (ex. $30) that covers the interest & fees (ex. $10) for a Pawn Interest Period, any EXCESS will be applied to pay off the Principal Loan Amount.

Example: If the interest & fees for each period is $10, when the customer pays $30, they will add a Pawn Interest Period and they will also be paying off the Principal Loan Amount (ex. $100) by $20…. The next period’s interest & fees will be adjusted accordingly.

Maturity date, Pawn Grace Period, and Loan Hold Notice Period will be delayed accordingly.

 

 

Normal Renewal

The customer can pay the interest & fees for the ENTIRE Pawn Term, the loan will completely restart. The new Loan Date will be the day the customer renewed.

 

Example: Original Loan Date is 1/1/16, and the Maturity Date is 4/1/16.  The customer comes in for a renewal and pays the interest & fees for the ENTIRE Pawn Term on 2/1/16. Now, the loan restarts and the new Loan Date is 2/1/16. The new Maturity Date is 5/1/16

 

End of Final Period Renewal

The customer can pay the interest & fees for the ENTIRE Pawn Term, the loan will completely restart. The new Loan Date will be the same as the Maturity Date of the original Loan.

Example: Original Loan Date is 1/1/16, and the Maturity Date is 4/1/16.  The customer comes in for a renewal and pays the interest & fees for the ENTIRE Pawn Term. Now, the loan restarts and the new Loan Date is 4/1/16. The new Maturity Date is 7/1/16