Forum Discussion
Excel formula help
- I'm not sure but I think what the OP is getting at is that the partial payments need to be taken into account such that the 10% is applied to the remaining balance at that time. So if the original loan is 1000 and 10% interest so principle & Interest is 1100 that has to be paid by due date but if only 500 was paid then 600 is outstanding balance and would get 10% penalty so new loan balance would be 660 the month after the due date and if they paid 260 then the next month would have another 10% penalty but only on the remaining 400 so the new balance would be 440.
Maybe Mbarak630 could confirm or correct this
If this is the case I think we could use LAMBDA function with REDUCE to do this
on another note I was looking at the sheet and noted the formula in G5, which I think is overly complicated, but also bring another factor in because the payment page only identifies the customer and not the specific loan reference so a customer with multiple loans has to be considered. Please note that I would highly recommend adding the loan reference to the payment sheet (or replace customer name with loan reference). Then the customer can and should identify which specific loan they are making payment on. If you have some sort of policy that they must pay in order then YOU should be identifying which loan that payment is on which will get messy especially when a payment finishes 1 or more loans and carries into the next.
I think it would also be better to use additional columns to show the cumulating values to better understand where the extra amounts (penalties) are coming from and where the payments are going; especially when the customer calls with questions. So maybe on the payments page there could be added column(s) to track outstanding balance (pre-payment), penalties (since last payment), new outstanding balance and such. These added columns could make the formulas more reasonable and provide more transparency.
The formular in G5 was pulling payments paid and if the loan is cleared and there be overpayment then the extra amount will be used to pay for the next loan.
another update with a cap on the penalties after 3 months
yes, payments made were and the allocation was given priority to the earlier loans.
I think best is to avoid multiple loans running for one customer, but stick one loan per customer and until it is fully paid inclussive of all penalties and there is no outstanding amount, then a new loan can be
- If I remember correctly the problem is that this formula doesn't track which loan a given payment is being applied to. Technically the 2 loans could overlap as long as the first is paid off before the DUE date of the next. An additional conditional on the penalty accrual function could be added to check if the NET total payment has exceeded all prior loan commitments (i.e. prior loans paid off) and not apply payments until that happens.
You are correct, i was just trying to see if a customer has two loans, what was the effect and i saw the issues arising, and so to avoid it then only one loan for a customer and must be cleared before another is taken.
Also, its better if I use the Loan ID, and the penalties were necessary because if loan wasnt paid by due date, then the penalties apply.
I will replace customer name with Loan ID
- yes, as I noted in an earlier message "Please note that I would highly recommend adding the loan reference to the payment sheet (or replace customer name with loan reference). " That said I did try this and it was working but I did make the assumption as you noted that for a given customer "the prior loan must be paid off before a new loan" is issued. If the loans overlap that would cause an issue. IF you change this to be based on a specific loan ID then the formula can be simplified as the whole summation of prior loans and payments and penalties wouldn't be needed.
That all said, you say "I changed the invoice dates for both row 5 and row 6, as 18-feb-23, same customer name, loan amount is same, however cell H6 and I6 have values different to H5 and I5 ." but I don't know what you are saying. Is there something wrong with the calculation? You should expect rows 5 and 6 to be different as they are for 2 different loans and if they are the same customer then I5 better be zero based on the above assumption while I6 will depend on if it paid off yet. Column H is specifically the 'Applied Penalties' accrued for that specific loan (not the total for the customer). I wouldn't say that i fully understood, but after testing the first row 5 and and can say that it was working as i was expecting.
I changed the invoice dates did calculations manualy and saw i was getting same results.
I changed the invoice dates for both row 5 and row 6, as 18-feb-23, same customer name, loan amount is same, however cell H6 and I6 have values different to H5 and I5 .
This got me a little confused
- I'm glad it is working as desired and I hope the explanation was help/enough for you to have some understanding of how it is working.
