Re-Amortize

Operational Use Cases

• Hardship smoothing before maturity: Borrower has fallen behind but the loan (Dynamic engine) is still within its term. Re-amortization spreads remaining principal evenly over upcoming installments.
• Operational corrections: Adjust future installments after backdated corrections or lump-sum payments so the payment plan remains manageable.

Supported only on the Dynamic repayment schedule engine, non-interest-bearing loans, before the contractual maturity date. Interest recalculation is not involved because qualifying loans do not accrue interest.

Examples use Baseline C (non-interest Dynamic loan). The Dynamic engine validator requires the loan to be non-interest-bearing; interest-bearing (Baseline B) loans will be rejected.

Need re-age or re-amortize?

• Choose re-amortize while the loan is still within its original term and you only need to redistribute existing principal across upcoming installments.
• Switch to re-age once the loan has already passed maturity and you must create an all-new tail of installments. Re-age extends the term; re-amortize keeps the term fixed.

Lifecycle Snapshot

flowchart LR
    A[Identify earliest unpaid installment] --> B[Submit reamortize command]
    B --> C[Outstanding principal redistributed across remaining installments]
    C --> D[Loan continues with smoother payments]
    D --> E{Need to undo?}
    E -->|Yes| F[Submit undoReAmortize]
    E -->|No| G[Follow updated schedule]

API Playbook

1. Apply re-amortization

   HTTP

   POST /v1/loans/{loanId}/transactions?command=reamortize
   {
     "locale": "en",
     "dateFormat": "dd MMM yyyy",
     "note": "Smoothing payments after partial prepayment"
   }

   Validations:

   • Loan must be Active, Dynamic schedule, non-interest-bearing, and not past maturity.
   • Only one re-amortization per business day.

2. Undo (if needed)

   HTTP

   POST /v1/loans/{loanId}/transactions?command=undoReAmortize
   {
     "note": "Reversed after borrower declined the plan"
   }

   Disallowed if repayments have posted after the re-amortization.

Tips for Operations Teams

• Re-amortization does not change the number of installments—only the amounts. Communicate the new payment schedule to the borrower.
• Use notes to record the hardship or operational reason in case of future audits.

Baseline Example (Dynamic Loan C)

Before maturity, borrower misses installment #3 (USD 100). Running reamortize on 25 Feb 2026 redistributes the USD 100 shortfall across the remaining three installments (non-interest loan).

Transactions created

Schedule before vs after (installments #4–#6)

Loan summary delta

Verification checklist

1. GET /v1/loans/{id}?associations=repaymentSchedule,transactions to confirm the REAMORTIZE transaction and updated installment amounts.
2. Undo only if no repayments have posted after 25 Feb 2026.