Servicing Overview

Repayment / Prepay payoff

Payments API → POST /v1/loans/{loanId}/payments/initiate

✅ borrower → lender

Collects a scheduled or payoff amount. The loan balance updates after settlement because PaymentSettlementLoanTransactionListener posts the repayment.

✅

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Foreclosure payoff

POST /v1/loans/{loanId}/transactions?command=foreclosure

✅ borrower → lender

Calculates a forced payoff, records the foreclosure transaction, and moves status to Foreclosed after funds arrive.

✅

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Record external payment

Payments API → POST /v1/loans/{loanId}/payments/record

✅ borrower → lender

Mirrors a payment collected outside Embarc (e.g., cash desk, lockbox) and applies the repayment allocation strategy.

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Close (zero balance)

POST /v1/loans/{loanId}?command=close

❌

Marks a zero-balance loan as Closed after prior refunds or repayments have cleared it.

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Undo approval

POST /v1/loans/{loanId}?command=undoApproval

❌

Rolls an Approved loan back to Submitted so terms can be edited before re-approval.

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Charge-off

POST /v1/loans/{loanId}/transactions?command=charge-off

❌ (GL loss booking only)

Sets status to Charged-off, freezes accruals per chargeOffBehaviour, and posts loss entries by component.

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Write-off

POST /v1/loans/{loanId}/transactions?command=writeoff

❌ (GL write-off only)

Clears receivables and moves the loan to Closed – Written-off. Future recoveries use recoverypayment.

✅

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Payout reversal

POST /v1/loans/{loanId}/transactions?command=payoutRefund (after Payments API payout)

✅ borrower → lender

Claws back lender-funded disbursements (ACH/RTGS). May auto-create an interest refund.

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Merchant credit

POST /v1/loans/{loanId}/transactions?command=merchantIssuedRefund (after merchant reimburses)

✅ merchant → lender

Merchant-funded credit that reduces the schedule without moving lender cash; eligible for automatic interest refunds.

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Excess payment refund

POST /v1/loans/{loanId}/transactions?command=refundByCash (after Payments API refund)

✅ lender → borrower

Returns amounts the borrower paid in advance while the loan remains Active (amount ≤ paid-in-advance balance).

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Credit balance refund

POST /v1/loans/{loanId}/transactions?command=creditBalanceRefund (after Payments API refund)

✅ lender → borrower

Sends back surplus payments when the loan is Overpaid and flips status back to Active.

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Charge refund

POST /v1/loans/{loanId}/transactions?command=chargeRefund (after Payments API refund)

✅ lender → borrower

Returns cash already collected for a fee or penalty; updates the linked charge history.

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Goodwill credit

POST /v1/loans/{loanId}/transactions?command=goodwillCredit (after Payments API payout if cash-funded)

✅ lender → borrower (when cash-funded)

Institution-funded credit that behaves like a repayment so delinquency and allocation follow standard rules.

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Interest refund

POST /v1/loans/{loanId}/transactions/{refundId}?command=interest-refund (or auto via refund)

✅ lender → borrower

Reverses previously accrued interest tied to payout reversals or merchant credits; can be automatic or manual.

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Waive interest

POST /v1/loans/{loanId}/transactions?command=waiveinterest

❌

Removes unpaid accrued interest up to the waiver date while leaving principal intact.

✅

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Promo interest credit

POST /v1/loans/{loanId}/transactions?command=interestPaymentWaiver

❌

Dynamic-only synthetic repayment that follows the Promo / Payment Waiver allocation row (interest-first).

❌

✅

Interest pause

POST /v1/loans/{loanId}/interest-pauses

❌

Adds a term variation that halts interest accrual for a defined date window (dynamic installment, interest-bearing, IR-enabled loans only).

❌

✅

Re-age

POST /v1/loans/{loanId}/transactions?command=reAge

❌

Appends hardship installments for non-interest Dynamic loans after maturity, redistributing outstanding principal.

❌

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Re-amortize

POST /v1/loans/{loanId}/transactions?command=reAmortize

❌

Redistributes remaining principal across future installments on non-interest Dynamic loans before maturity.

❌

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Reschedule workflow

POST /v1/rescheduleloans → GET ...?command=previewLoanReschedule → POST ...?command=approve

❌

Rewrites the loan schedule. Fixed loans can combine grace, extra-term, EMI, or rate changes; Dynamic loans must choose either adjustedDueDate or newInterestRate.

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Contract termination

POST /v1/loans/{loanId}/transactions?command=contractTermination

❌

Dynamic BNPL action that accelerates remaining amounts, tags the loan as Contract Termination, and awaits downstream payoff/refund/charge-off.

❌

✅

Buy-down fee

Payments API → paymentCommand=buyDownFee + POST /v1/loans/{loanId}/transactions?command=buyDownFee

✅ merchant → lender

Logs a merchant-funded subsidy and places it in the buy-down amortization pipeline (LoanBuyDownFeeAmortizationProcessingService).

❌

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Capitalized income

POST /v1/loans/{loanId}/transactions?command=capitalizedIncome

❌ (cash received earlier)

Moves earned-but-deferred revenue into a liability that LoanCapitalizedIncomeAmortizationProcessingService recognizes over time.

❌

✅

Down payment capture

Auto via enableDownPayment at disbursement or POST /v1/loans/{loanId}/transactions?command=downPayment

✅ borrower → lender

Collects the borrower’s upfront contribution for Dynamic loans; marks the down payment period as paid.

❌

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Recovery payment

POST /v1/loans/{loanId}/transactions?command=recoverypayment

✅ borrower / debt buyer → lender

Logs cash collected after charge-off or write-off while keeping the loan closed; credits recovery income accounts.

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Charge adjustment

POST /v1/loans/{loanId}/charges/{chargeId}?command=adjustment

❌

Reduces the amount of a posted charge without moving cash; creates a CHARGE_ADJUSTMENT transaction.

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Chargeback

POST /v1/loans/{loanId}/transactions/{transactionId}?command=chargeback

✅ lender → borrower/processor

Reinstates part or all of a prior repayment when the processor claws funds back (card/ACH dispute). Reopens principal on the business date; blocked on Fixed loans that have interest recalculation enabled

⚠️ (only when IR is off)

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Promise to Pay

POST /v1/loans/{loanId}/promises-to-pay

❌

Creates and tracks a payment promise with its own schedule and standing; evaluation marks installments due/missed, and plans close as completed/defaulted or cancel with a reason. Does not change the loan’s amortization.

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Bankruptcy management

POST /v1/clients/{clientId}/bankruptcies

❌

Records client bankruptcy cases (chapter, petition, stay, claims/objections); enabling stay cancels autopay and blocks new enrollment; active check gates downstream workflows

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