Loan Payment - Payment Allocation Process (Waterfall Rules)

When there are partial payments made, there is a payment hierarchy listed below that is applied by default. 

Waterfall Rules:
Current Payment (Pay Period) Impound
Current Payment(Pay Period) Due Lender Fees
Current Payment(Pay Period) Interest
Current Payment(Pay Period) Late Fee

Outstanding Lender Fees
Outstanding Interest
Outstanding Late

Principal

Enter Manually
Otherwise, you can select the 'Enter Manually' button instead of 'Accept These Values' to reassign the funds that are paid by the borrower.
If there are past due items, you can pay for the outstanding interest, or even apply funds to the hold account and keep current pay period dues as outstanding.