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Loan Restructuring

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Overview and Example Use-Cases

When operating lending programs, there are a variety of situations where you need to change the terms of a given loan. The best practices under why and when to do so can vary dramatically. For instance:
  • You may have a variable interest rate clause
  • You may have a program that allows borrowers to periodically draw additional funds, increasing the principal balance on the new loans
  • You may run a loan program with clauses for borrowers to refinance different loans at different times or consolidate loans with different interest rates
  • You may have a negotiated agreement with a specific borrower to reduce the interest rate on a loan or extend its duration.

Loan Restructuring Capabilities

Depending on your borrower agreement, you may have issued a new loan agreement, or you may need to make a modification that occurs within the structural parameters of your existing borrower agreement.
Canopy’s Loan Restructuring feature allows you to:
  • Modify a loan while preserving all of a borrower’s account information (instead of closing the account and opening a new one)
  • Maintain a full audit trail of all changes to the loan
  • Meet the intimate and use-case-specific needs of your borrowers with post-origination loan modifications that are applied per the unique needs of your lending program
Any parameter that is set at the time of loan creation can be modified when refinancing a loan — you can change origination. This includes:
  • Interest policies for the loan
  • Fee policies for the loan
  • Loan term
  • A new ID to reference the refinanced loan (note: the overall account ID will not change)

Scheduling the loan modification

Optionally, you can set a time for the restructuring via the effective_at parameter. If none is provided, the refinancing will occur immediately upon your request.
You may restructure a loan unlimited times — this means you can structure unique lending programs with high-frequency refinances based on fluctuating needs from your borrowers.
Developers: Check out our API Reference to see how to make Loan Modification requests to Canopy.

CanopyOS Demo

Below is a guided demo of how Loan Restructuring is displayed within Accounts inside of CanopyOS.

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