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Late Fee

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Settings for late fee calculations for this lease or loan.

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Days before delinquent represents the number of days that can pass after the payment due day before a deal will be assessed a late fee. This is also referred to as the grace period. Be careful when setting this field, as it strongly controls the late fee assessment. For example, if you have deals that are paid weekly, setting the grace period to 7 or more days would result in the customer to never be assessed a late fee or statement. Here are the recommended delinquent day settings:
  • Weekly. Zero days. Your customers are keenly aware that they signed a contract for weekly payments. If they cannot make these payments on time, then "sock it to them" with late fees or repo the collateral.
  • Bi-weekly or semi-monthly. 0-2 days. Like weekly deals, your customers should know that they are on the hook for at least 2 payments per month. 2 days are recommended to allow for weekends.
  • Monthly. 0-10 days. 5 days is recommended.

    Grace period end day of month is used as an override to the Days before delinquent. This may be between 1 and 31 and represents a fixed day of the month on which the grace period will end. USE THIS FOR MONTHLY DEALS ONLY!!! (Set this to zero to NOT override the Days before delinquent.) Setting this to 31 will cause ALMSys to always use the last day of the month. You would typically use this override when you have the same day of month due for all of your deals and you want your grace period to end on the same day for everyone, regardless of how many days are in the month.

    Late fee based on percentage of .... is used to set the method of calculating the fee. There are five methods:

    1. Monthly Payment Principal + Interest: If any amount is owed after the grace period has expired, this method will simply calculate the late fee amount as the percentage (explained next) times the base amount (principal plus interest) of the payment.

    2. Amount Owed, Excluding Fees: If any amount is owed (excluding fees) after the grace period has expired, this method will calculate the late fee as the percentage times the amount owed.

    3. Minimum, or percent of P & I, to Maximum: If any amount is owed (excluding fees) after the grace period has expired, this method will calculate the late fee as the percentage times the base amount (principal plus interest) of the payment.

    4. Amount Owed, Excluding Delinquent Fees Only: This is similar to type 2, but only excludes those late fees that are considered delinquent.

    5. Total Outstanding Amount Owed. This will calculate the late fee as a percentage of the current total outstanding amount owed. Caution: This may charge late fees on top of late fees. Some states and provinces prohibit this practice.

    Percentage to calculate is the percentage to use to calculate the late fee. Fifteen percent would be entered as 15, five and a quarter percent would be entered as 5.25.

    Minimum late fee dollar amount is the minimum dollar amount that each late fee calculation is to be. This is applied to all calculation types.

    Maximum late fee dollar amount is the dollar amount that each late fee calculation is not to exceed. This is applied to all calculation types.

    Percentage of outstanding amount owed due to avoid a late charge is how much the customer may pay of the current amount owed to avoid a late fee. For example, if this percentage were set to 95, then that would indicate that the customer would only need to pay 95% of the total amount owed to avoid the late fee. In other words, if John Doe is billed $300.00 and only paid $285.00, then a late fee would not be assessed. If you wish to always charge a late fee when any amount is delinquent, set this to 100. If you wish to never charge a late fee (no matter what), set this to 0.

    If the calculated late charge is less than... will completely suppress a late fee if it is calculated less than this number.

    Generate Late Letter is used in conjunction with the Delinquency Report, which will only generate data for a late letter if this field is marked as "Yes." The date of the last late letter is provided on this screen.

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    Billing Late Fee