Loan Engines - Overview

Embarc supports two loan engines which can be configured at a Loan Product Level. Picking the right one keeps servicing, accounting, and reporting simple.

Quick Comparison

Fixed Schedule Loans

Best for: traditional installment credit (consumer loans, installment finance, standard term loans).

How they behave

• The repayment plan is pre-calculated: equal installments or classic amortization (interest-first, flat, etc.).
• Extra payments can reduce the balance sooner, especially if interest recalculation is enabled, but the schedule itself is predictable.
• Great fit for customers who expect a clear EMI table, want optional lining to Index interest rates, or rely on conventional statements and payoff quotes.
• Best for single Disbursements. Also supports planned multi-tranche disbursements where each tranche is known in advance and reflected in the schedule at the time of the first disbursement.

When to use

• Consumer loans, vehicle finance, or any product where borrowers expect equal payments.
• Regulatory environments that require amortization schedules up front (e.g., US-style Truth in Lending disclosures).

Dynamic Schedule Loans

Best for: Buy Now Pay Later, promotional financing, Merchant subsidized plans, or any structure where installments need to adapt on the fly.

How they behave

• Buy-down fees, income capitalization, and merchant subsidies are baked into the engine.
• Every disbursement or repayment can trigger strategy services that re- compute future installments.
• Contract termination (ending the plan early without payoff) is supported.

When to use

• BNPL and merchant financing where promotional interest and subsidies shift across the lifecycle.
• Products that need to capitalize income or recognize subsidies over time.
• Servicing flows that rely on Embarc’s payment allocation engine for precise accruals and revenue recognition.