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
| Feature / Need | Fixed Schedule Loans | Dynamic Schedule Loans |
|---|---|---|
| Equal, predictable installments | ✅ | ⚠️ Future installments change as new advances are made |
| Buy down fees, Income Capitalization | ❌ | ✅ |
| Configurable payment allocation for each servicing action (Repayments, Interest waivers, Refunds, Credits) | ❌ | ✅ |
| Best for | Traditional installment loans | BNPL, EWA, promotional or merchant-financed plans |
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.
Updated 8 months ago
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