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.