Prorating your Loan

Prorating your loan is necessary when the closing date of your loan, and the date of your first payment do not fall on the same dates as your payment frequency.  For example, if you make your loan on the 15th of the month and expect your borrower to pay you on the first day of every month, you can’t expect the borrower to pay for 30 days of interest on the 1st of the month following the closing date of the loan.  In this case, you would charge only half the interest for the first 15 days of the loan.  You are prorating the interest for the first 15 days of the loan to allow you to get the loan on a 1st of the month payment schedule.  Prorating correctly ensures that both the borrower and the lender pay their fair share for the initial abbreviated payment period.

Bryt allows you to calculate and collect this payment either on the closing date or with the first payment.

Bryt allows you enter a manual prorate amount or the system will calculate the prorate amount for you.  When Bryt calculates the prorate amount for you, it multiplies the number of days in your prorated payment period by your Per Diem or Daily Interest. 

Example:

Bryt Prorate Settings 

Prorate the first period: 

• Choose “No” if you do not need to prorate the loan. Choosing “No” will make the closing date the start of the first payment period. 
• Choose “Yes” to prorate the loan. 
  1. For the auto-calculate option, the system will calculate the prorate amount according to the daily interest rate times the number of days in the prorate period. 
  2. If you want to charge an amount that is different than this, choose the manual option.

Ending Date of the Prorate Period: This is the last day of the prorate period. The next day will start the first full payment period.

Collect First Prorate Payment: 

• If you choose to collect your prorate payment at closing, the system will calculate the prorate amount as a separate payment. 
• If you choose to collect your prorate payment with your first payment, the system will add the prorate amount to your first payment.

Manual Prorate Amount: Enter the amount that you want to charge for the prorate period if you do not want the system to auto-calculate this amount.