Offer Configuration
The offer is the one that defines the conditions that a specific credit will be governed by and where the largest number of configurations are housed. MO's offer configurator is composed of broad and granular parameters that allow our clients to create tailor-made products and aim them to different segments of users.
Offer configurations
The client defines the product configuration. Our team configures it via command and it takes up to 4 hours for it to be live in the project.
To configure your new offer, there are several options to choose from. Please review each option to better understand how it can be used to tailor your offer.
General settings
Configuring the offer main settings is a crucial step in tailoring the characteristics and parameters of a credit offer to align with specific business requirements. Below are descriptions of each available configuration option:
- Offer Type: ?????????????
- Range of date: Allows you to specify a defined time period during which a particular credit offer is valid and accessible
- Name: An easily understandable name should be carefully selected to convey the nature of the credit, ensuring a comprehensive understanding of its intended purpose.
- Description: Serves as an additional layer of information, complementing the name to provide nuanced details about the offer.
- Maximum and minimum credit amounts: Specify the lowest and highest values users can request for a particular offer.
- Downpayment: It represents the percentage of the requested amount that users are required to pay upfront at the time of the credit request. This option mainly applies to BNPL use cases.
- Percentage of purchase: The amount required as a downpayment at the moment of purchase.
Repayment logic
Repayment logic allows administrators to set up the complex rules that determine how repayments are calculated and handled. Each component of Repayment Logic is crucial in shaping the financial aspects of the credit offer. It is essential to understand each configuration option to ensure that the repayment logic perfectly matches your business objectives, regulatory obligations, and the individual financial circumstances of your users. Below are descriptions of each available configuration option:
| Setting | Setting description | Option | Options description |
|---|---|---|---|
| Repayment type | Define how the credit will be repaid. You can choose between installments and sales discounts. | ||
| Installments | Specify the number of equal payments through which a borrower will fulfill their credit obligation. | ||
| Sales Discounts | Automatic discounts are based on a percentage of sales made by the user during the credit term. | ||
| Percentage type | Dictates how interest rates are structured for a credit offer. | ||
| Fixed | A consistent interest rate maintained throughout the credit term ensures stability and predictability for borrowers, enabling straightforward financial planning. Ideal for those who value consistent repayment amounts. | ||
| Dynamic | The dynamic percentage type is a flexible loan with a variable interest rate that can adapt to changing conditions or predefined criteria. While it offers adjustability, it may involve periodic recalibrations, which can result in variability in repayment amounts based on evolving circumstances. The Fixed option offers stability, while the Dynamic option suits those seeking an adaptable approach to interest rates. | ||
| Periodicity | Frequency in which the customer must repay the obligation. This setup will be used to calculate the term of the credit. | ||
| Daily | Repayments are scheduled every day. | ||
| Weekly | Repayments are scheduled every week. | ||
| Fortnightly | Repayments are scheduled every two weeks. | ||
| Monthly | Repayments are scheduled every month. | ||
| Calendar logic | Choose whether repayments for this offer can be issued on business days only or on any calendar day. | N/A | N/A |
| Fixed or Relative | Choose whether payments are issued on a fixed day or relative to the exact disbursement date. | N/A | N/A |
| Number of installments | Choose the number of installments limits. | N/A | N/A |
| Amortization type | The type of installment defines the calculation logic for the payment schedule of the credit. | ||
| French | The amortization method known as "French" or "annuity" involves equal payments at regular intervals that include both principal and interest. This approach provides a predictable repayment structure, making it easier for borrowers to manage their finances. Over time, the interest component decreases while the principal repayment increases, resulting in a gradual reduction of the outstanding balance. | ||
| German | The constant amortization method, also known as the "German" amortization type, involves repaying a fixed amount of principal in each installment. This results in a decrease in the total interest over the loan term, while the principal repayment remains the same. This approach offers borrowers a transparent and simple repayment schedule, which is ideal for those who prefer stable repayment amounts. With each installment, the outstanding principal amount is reduced, leading to a gradual decrease in the overall interest paid over time. | ||
| Missed repayment logic | In case of a missed payment, select how the unpaid amount is paid. | ||
| Accumulate | Adds the unpaid value to the next installment amount. | ||
| Re-differ | Redistribute the unpaid amount throughout the remaining installments. | ||
| Extend | Adds the unpaid amount as a new installment after the last installment. | ||
| Grace period | Select whether the credit allows a grace period before defaulting on installments. | N/A | N/A |
Charges
In the Charges section of our platform, you can fine-tune and personalize various financial aspects of your account. For instance, you can adjust the interest rates that apply to the offer. You also have the option to customize the costs that are associated with certain transactions or activities, such as withdrawal fees or overdraft fees, to better align with your business needs.
Additionally, you can configure the collection costs that may be incurred in the event of a delinquent account, such as the cost of a collection agency or legal fees. Furthermore, you can also set the default interest rate that will be applied when a loan or credit repayment is overdue, ensuring that late payments do not financially impact your company.
Interest
Configuring interest rates is a crucial part of credit management that defines the financial landscape of credit offers. Our system empowers administrators to align interest rates with business strategies and user needs, whether seeking stability or flexibility. Below are descriptions of each available configuration option:
| Setting | Setting description | Option | Options description |
|---|---|---|---|
| Interest value | Choose the annual interest rate to calculate the interest for this credit offer. | N/A | N/A |
| Base definition | Specify whether interest is calculated on total or capital balance. | ||
| Total balance | Interest is calculated on the total balance amount, including other costs, fees, interest and taxes. | ||
| Capital balance | Interest is calculated on the capital balance only, removing other costs from it. | ||
| Conversion mode | Select the method of converting the rate to a daily periodicity. | ||
| Simple | Employs a straightforward approach to convert the interest rate to a daily periodicity, considering a fixed interest amount applied daily. Ideal for scenarios where interest accrual is calculated without compounding complexities. | ||
| Compound | Utilizes a compounding method in converting the interest rate to a daily periodicity, considering the accumulated interest on the outstanding balance. Suitable for scenarios with compound interest accrual. | ||
| Tax | If regulations apply, select to include interest tax. If so, enter the respective tax fee. | ||
| Tax fee | Specify the corresponding tax fee as a percentual value. | ||
| Periodicity | Frequency that determines the accrual of interests. | ||
| Daily | Daily accrual of interests. | ||
| Weekly | Weekly accrual of interests. | ||
| Monthly | Monthly accrual of interests. | ||
| Daily Bussiness month | Interests accrue monthly based on 30-day months. | ||
| Fixed or Relative | Choose if interests for this offer will be accrued at a fixed day, or at the exact date of disbursement. | N/A | N/A |
| Grace period | Select if this credit will allow a flexible time period before interest default measure takes place. | N/A | N/A |
Costs
You can now personalize the costs that come with specific transactions or activities, like withdrawal fees or overdraft fees, to match your business requirements. You can add up to seven different costs for each credit offer. Below are descriptions of each available configuration option:
| Setting | Setting description |
|---|---|
| Type of cost | Configure you new cost to be applied, adding a name and a description to it. |
| Fixed or percent | Select whether this cost will be a fixed amount or percentual amount. |
| Charge at | Specify whether the cost will be charged in the first installment or spread over all installments. |
| Tax | If regulations apply, you may include a tax for this cost. In that case, please enter the respective tax fee. |
| Generation mode | ?????????? |
Collection costs
Collection costs encompass expenses incurred in the process of recovering overdue payments from borrowers. These costs may include fees associated with engaging third-party collection agencies, legal fees, and administrative expenses related to pursuing outstanding debts. Below are descriptions of each available configuration option:
| Setting | Setting description | Option | Options description |
|---|---|---|---|
| Trigger | Define when the collection cost will be triggered. | ||
| Late installment | ????????????? | ||
| Late due date | ????????????? | ||
| Grace period | Select whether this credit will allow a flexible time period before collection costs trigger activates. | ||
| Fixed or percent | Select whether the collection cost will be a fixed amount or percentual amount. | N/A | N/A |
| Tax | If regulations apply, you may include a tax for the collection cost. In that case, please enter the respective tax fee. | N/A | N/A |
| Charge at | Specify whether the collection cost will be charged in the next installment or spread over all remaining ones. | N/A | N/A/td> |
Default interest
Default interest, also referred to as late payment interest or penalty interest, is an extra charge levied on overdue amounts when a borrower doesn't make payments on time, as mentioned in the credit agreement. This increased interest rate is imposed as a punishment for failing to make payments, motivating borrowers to comply with the agreed repayment plan. Below are descriptions of each available configuration option:
| Setting | Setting description | Option | Options description |
|---|---|---|---|
| Trigger | Define when the default interest will be triggered. | ||
| Late installment | ????????????? | ||
| Late due date | ????????????? | ||
| Interest value | Choose the annual interest rate to calculate the default interest for this credit offer. | N/A | N/A |
| Base definition | Specify whether the default interest is calculated on total or capital balance. | ||
| Total balance | Interest is calculated on the total balance amount, including other costs, fees, interest and taxes. | ||
| Capital balance | Interest is calculated on the capital balance only, removing other costs from it. | ||
| Conversion mode | Select the method of converting the rate to a daily periodicity. | ||
| Simple | Employs a straightforward approach to convert the interest rate to a daily periodicity, considering a fixed interest amount applied daily. Ideal for scenarios where interest accrual is calculated without compounding complexities. | ||
| Compound | Utilizes a compounding method in converting the interest rate to a daily periodicity, considering the accumulated interest on the outstanding balance. Suitable for scenarios with compound interest accrual. | ||
| Tax | If regulations apply, you may include a tax for the default interest. In that case, please enter the respective tax fee. | N/A | N/A |
| Charge at | Specify whether the default interest will be charged in the next installment or spread over all remaining ones. | N/A | N/A |
| Grace period | Select whether this credit will allow a flexible time period before the default interest trigger activates. | N/A | N/A |
Editing offers
If necessary, you may modify the percentage of the default interest so that active credits can adopt the new rate. To do so, please contact MO's support team.
Further changes
If you wish to modify the terms of an offer, you have the option to deactivate the existing offer with the current terms. This deactivation will not affect any loans that have already been issued under those terms. At the same time, you can create a new offer with the updated conditions, which will apply to any new credit transactions going forward
Updated about 1 month ago