Late Fees & Collections

Configure per-loan late fee rules, monitor delinquency status, manage non-accrual designations, and process write-offs for uncollectible balances.

Late Fee Configuration

Late fees are configured per loan during origination or at any time via a loan modification. Each loan carries its own late fee parameters, allowing you to tailor fee structures to different borrower agreements.

FieldTypeDescription
late_fee_rateDecimalPercentage of the overdue payment amount charged as a late fee (e.g., 5.00 means 5%).
late_fee_grace_daysIntegerNumber of days after the due date before a late fee is assessed. Typical value: 10-15 days.
late_fee_minDecimalMinimum late fee amount in dollars. The fee will never be less than this value, even if the percentage calculation yields a lower amount.
late_fee_maxDecimalMaximum late fee amount in dollars. Caps the fee regardless of the percentage calculation.

Example: A loan with late_fee_rate: 5.0, late_fee_grace_days: 15, late_fee_min: 25.00, late_fee_max: 500.00

  • Payment of $2,000 is due on March 1
  • Grace period ends March 16
  • If unpaid by March 16: late fee = max($25.00, min($100.00, $500.00)) = $100.00

Delinquency Tracking

CEF Core automatically tracks delinquency using three fields on every loan record. These fields are updated by the daily accrual engine and reflect the current state of the loan.

days_delinquent

The number of calendar days since the oldest unpaid payment was due. Resets to zero when all past-due payments are current. This is the primary metric used for delinquency classification.

delinquency_status

Automatically derived from days_delinquent:

Days Past DueStatus
0CURRENT
1-29LATE
30-59DELINQUENT_30
60-89DELINQUENT_60
90+DELINQUENT_90

collection_status

Manually set by staff to indicate the collection stage: NONE, CONTACT_INITIATED, PAYMENT_PLAN, LEGAL_REVIEW, or REFERRED_TO_COUNSEL. Updated via the loan detail view or the PUT endpoint.

Non-Accrual Status

When a loan reaches 90 days past due, CEF Core automatically places it on non-accrual status. This is a regulatory best practice for church extension funds and affects how the loan appears in financial reports.

What Happens on Non-Accrual

  • Daily interest accrual stops
  • Previously accrued but uncollected interest is reversed
  • Any payments received are applied to principal first
  • Loan is flagged in the delinquency dashboard
  • Loan status may transition to DEFAULT

Returning to Accrual

  • Borrower brings all past-due payments current
  • Staff reviews and confirms the loan is performing
  • Staff changes loan status back to ACTIVE
  • Interest accrual resumes from the reinstatement date
  • Non-accrual period is logged in the audit trail

Write-Offs

When a loan is deemed uncollectible, CEF Core supports recording a write-off. Write-offs reduce the loan balance and generate the appropriate GL entries.

FieldDescription
write_off_amountDollar amount being written off. May be a partial or full balance write-off.
write_off_dateDate the write-off is recorded. Used for financial reporting and tax purposes.

To process a write-off:

  1. Open the loan detail view and change the status to CHARGED_OFF.
  2. Enter the write_off_amount and write_off_date.
  3. Save. The system generates a GL entry: DR Loan Loss Provision, CR Loans Receivable.
  4. The loan remains in the system for historical reference but is excluded from active portfolio reports.

Important: Write-offs of $50,000 or more require maker-checker approval. The approval workflow is the same as loan origination -- a second authorized user must approve the action.

Monitoring Delinquencies

CEF Core provides several ways to monitor and manage delinquent loans across the portfolio.

  • ✓Loan List Filters: On the Loans page, filter by delinquency_status to see all 30+, 60+, or 90+ day delinquent loans in one view.
  • ✓Dashboard Widgets: The main dashboard shows a delinquency summary card with counts and total dollars at each aging bucket.
  • ✓Reports: Run the Delinquency Aging Report from Reports → Templates for a detailed breakdown by borrower, loan, days past due, and outstanding amounts.
  • ✓Alerts: The monitoring service flags loans that cross the 30, 60, and 90-day thresholds. Treasury staff receive notifications via the alerting system.

Best Practices

  • ✓Review Delinquencies Weekly: Run the aging report at least weekly. Early intervention is the most effective collection strategy for church borrowers.
  • ✓Document All Collection Activity: Update the collection_status and add notes to the loan record for every call, letter, or meeting. This creates an audit trail.
  • ✓Set Realistic Grace Periods: A 10-15 day grace period is standard. Shorter periods may generate excessive late fees for borrowers who pay by check.
  • ✓Use Min/Max Fee Bounds: Always set late_fee_min and late_fee_max to prevent trivially small or excessively large fees.

Modifying Loan Terms

Need to restructure a delinquent loan? Learn how to modify loan terms, change interest rates, and update payment schedules.

Loan Modifications Guide
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