Loan Promotion and Payment Types

Some obligor accounts in ConcordLink are set up with special promotional or payment structures that differ from a standard loan. Understanding these concepts helps you accurately answer obligor questions about their balance, payment amount, and account behavior.

Investment Tax Credit (ITC) buy/pay down

A program where an obligor is expected to pay their balance down to a specific target amount by a specific date. When that date arrives, the system automatically recalculates the monthly payment.

The obligation is configured with two key values:

• ITC Target Date: The deadline to reach the target balance.
• ITC Target Balance: The balance the borrower needs to reach by that date.

When the target date is reached, the system automatically triggers a re-amortization, recalculating the monthly payment based on the remaining balance and remaining payments to the original maturity date.

Same as Cash (SAC) / interest-free promotion

A promotional period where the borrower pays no interest — or reduced interest — for a defined period of time. If the borrower pays off the balance within the promotional window, they avoid interest charges entirely.

In ConcordLink, the obligor either pays a 0% interest rate, or pays at the contractual rate with previously applied interest converted back to principal if the SAC requirement is met.

Deferred interest

Similar to Same as Cash, but instead of waiving interest, the system tracks and stores accruing interest behind the scenes. If the borrower doesn't pay in full by the deadline, that stored interest becomes due.

• Interest accrues each month but is not immediately charged to the borrower.
• The system captures and stores the accrued interest.
• If the account is not paid in full by the defined deadline, the deferred interest becomes due through capitalization, a standalone fee balance, or payoff collection.

Interest only (IO)

For a defined period of time, the obligor's monthly payment covers only the interest owed — no principal is paid down during this time.

• Each month, the obligor is billed for only the accrued interest amount.
• The principal balance does not decrease during the IO period.
• Behavior differs slightly depending on whether the loan uses simple interest or daily interest, but the goal is the same: only interest is required to satisfy each monthly payment.

Interest only conversion to principal and interest (IO → P&I)

The account starts as an interest only loan for a set period, then automatically converts to a standard principal and interest (P&I) amortizing loan for the remainder of the term.

• At the point of conversion, ConcordLink calculates a new monthly payment based on the current interest rate and the number of payments remaining until the original maturity date.
• The interest type (simple or daily) remains consistent throughout the entire life of the loan — it does not change at conversion.

Adjustable rate / ARM (adjustable rate mortgage)

The interest rate on the loan is not fixed — it adjusts periodically based on predefined terms set by the client. The obligation is configured with client-defined adjustment terms, which may include an adjustment period, margin, index, ceiling, and floor.

Payment plans / steps

A feature that lets a borrower's payment amount and/or interest rate change automatically at predefined points during the loan — either on specific calendar dates or after a set number of payments. The obligation is pre-configured with a schedule of changes.

For example:

• Months 1–12: $150/month
• Months 13–24: $200/month
• Month 25+: $250/month

ConcordLink automates many recurring tasks to keep each obligation accurate and up to date. Always check the obligation's loan type and promotional setup before advising a borrower on their balance or payment amount. If you're unsure which structure applies, review the obligation's custom fields or escalate to your supervisor.

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