Loan management with TRESIO

Tresio Loan page is designed for comprehensive loan management, whether for commercial or consumer lending, transforming the way you track and forecast your loan payments. Emphasizing the critical importance of precise loan payment tracking, Tresio Loan page minimizes the risk of human errors, ensuring that no detail is overlooked. Paired with Tresio’s forecast screen, the risk of default becomes minimal, providing users with a proactive tool to anticipate and manage their financial obligations effectively.

Understanding the Loans screen

The ‘Loans’ screen provides you with ‘Loan settings’ where payments can be mapped to different categories and an ‘Edit variable rate’ link that takes you to the ‘Interest rates’ screen. Please note the ‘Loans’ and ‘Interest Rates’ screens are not displayed in the left-side menu by default, and you will need to ‘include’ them in the menu from the ‘DATA’ screen.

What the Loans screen shows:

  • Lender (bank) –  a bank or financial institution that issues a loan
  • Initial amount – loan amount borrowed
  • Outstanding amount – remaining amount to be paid on the loan
  • Currency – currency in which the loan is denominated
  • Loan type – user defined loan type that gets set up in ‘Loan settings’
  • Start date – the date on which a loan arrangement is to commence
  • Maturity date – the date on which a final loan payment is due
  • Is recourse -a recourse loan is a debt that is backed by collateral from the borrower and holds the borrower personally liable, allowing the lender to collect from the debtor and the debtor’s assets in the case of default.
  • Recourse comment – user’s comment regarding the recourse loan
  • Maturity date – the date on which a borrower’s final loan payment is due
  • Total loan amount – the principal of a loan is the sum of money you receive from a lender. Then interest is charged on that principal amount.

You have the option to copy, print, and export your loan’s details to PDF or Excel using the corresponding buttons.

How to manage ‘Loan settings’

The ‘Loan settings’ pop up allows you to define up to six loan types and map all types of loan payments to different categories. Those categories will be used to display loans in the ‘Planning ‘Liquidity Forecast’ screen.

To add a new loan type just click on the ‘New’ tab and fill in the details. Users also can edit the ‘Loan name’ by clicking on the pen icon at the top of the tab or by editing the name directly in the ‘Loan name’ field.

Please note, once a new loan tab is added, it cannot be deleted from the system.

How to add a new loan

By clicking on the ‘New’ button, a new entry pop-up will appear. In addition to the main fields shown on the Loan page, there are additional fields and tabs for the complete loan setup.

  • ‘Number of days in accounting year’ – A commercial year is a 360-day period composed of 12 months of 30 days. To make computations of interest on account payable simpler, banks all over the globe adopted a 360-day year instead of 365 days.

Interest tab – includes several fields to manage the loan’s interest details. The ‘Margin (%)‘ field specifies the margin percentage added to the variable rate. The ‘Plus variable rate schedule‘ is a list of reference rates that outlines the variable interest rates applied to the loan. The ‘First payment date‘ field indicates the date when the first interest payment is due. The ‘Periodicity‘ list allows you to select how often interest payments will be made (e.g. monthly, quarterly etc.).

Amortization schedule tab – includes several fields to help manage your loan payments. The ‘Amortization amount‘ fields specify the amount to be paid periodically towards the principal. The ‘First payment date‘ fields indicate the starting date for these payments. The ‘Periodicity‘ list allows you to choose how often payments will be made (e.g., monthly, quarterly etc.). The ‘Pay remaining balance on maturity date‘ checkbox, if selected, schedules the remaining loan balance to be paid in full on the loan’s maturity date. Lastly, the ‘Deduct interest amount from amortization payments, amortization will be paid on the same days as interest‘ checkbox ensures that interest is deducted from the amortization payments, aligning the amortization payment dates with the interest payment dates.

Withdrawal schedule tab – use ‘Add withdrawal amount’ button to add ‘Date‘ and ‘Amount‘ of the withdrawal.

First payment tab – shows the first payment ‘Name‘ and allows user to enter the first payment ‘Amount‘. The ‘Amount’ filed won’t be available if ‘First payment categories’ is not mapped to a category in the ‘Loan settings’ pop-up screen.

Last payment tab – shows the last payment ‘Name‘ and allows the user to enter the last payment ‘Amount‘. The ‘Amount’ filed won’t be available if ‘Last payment categories’ is not mapped to a category in the ‘Loan settings’ pop-up screen.

Additional data tab – users can enter recourse loan details. They can tick the ‘Is recourse‘ checkbox for a recourse loan and provide a ‘Recourse comment‘.

Reference Rates

The Reference Rates page displays the various defined interest rates, such as SARON, SOFR and Euribor, which are automatically downloaded and updated regularly, as well as any ‘Custom’ rates added by the user.

Please note, in order to see the ‘Reference Rates’ page it needs to be enabled via the ‘DATA’ screen.

  • Date – indicates the date when the rate will next be applied to calculations
  • Rate value – shows the current rate
  • Manual – if this box is ticked, the selected rate becomes ‘frozen’ and will not be automatically updated by the system, allowing for manual control over the rate

SARON – (Swiss Average Rate Overnight) is an overnight interest rate benchmark ‚Äď also known as a reference rate or a benchmark rate. It is based on the Swiss (CHF) repo market. The Swiss Stock Exchange (SIX) is the administrator of SARON and is responsible for its daily calculation and publication.

SOFR – (Secured Overnight Financing Rate) – is a benchmark interest rate for dollar-denominated derivatives and loans. The New York Fed publishes the SOFR on the New York Fed website daily.

Euribor – (Euro InterBank Offered Rate) – is the average interest rate at which a selection of large European banks provide one another with short-term loans in euros. Euribor is calculated by a benchmark administrator called Global Rate Set Systems Ltd. and offered by the European Money Markets Institute (EMMI).

How to add a Custom Rate

Users can enter a custom interest rate by clicking on the ‘New’ button and entering the ‘Rate value‘ and ‘Date‘. The ‘Manual‘ checkbox will be checked automatically, indicating that this rate won’t be overwritten by the system.

Supported loan types

  1. Fixed payment amortizing loan: regular, consistent payments where each installment pays both interest and principal until the loan is paid off.
  2. Decreasing payment amortizing loan: payments start higher and decrease over time as the principal is paid down, with each payment composed of interest and principal.
  3. Mortgages: used to finance real estate (commercial and / or private use).
  4. Revolving loan: a type of credit that can be used repeatedly up to a certain limit as long as the account is open and payments are made on time.
  5. Line of credit: a flexible credit facility allowing the borrower to draw funds up to a certain limit and repay at their convenience, paying interest only on the amount drawn.
  6. Balloon loan: typically involves small, consistent payments throughout the loan with a large lump-sum payment due at the end of the term to cover the remaining principal.
  7. Asset-based loan: a loan secured by assets, where the loan amount is based on a percentage of the appraised value of the assets.

These are the primary loan categories, but there can be variations and specialized loan types within each category to suit specific needs and circumstances.