Waive Interest

Operational Use Cases

• Billing disputes or service failures: Remove interest that accrued incorrectly.
• Hardship support: Forgive part or all interest due for a given period while keeping principal intact.
• Regulatory caps: Enforce interest waivers mandated by law or court orders.

Supported on both Fixed and Dynamic repayment schedule engines. For loans with interest recalculation, Embarc reprocesses accruals and delinquency the moment the waiver posts.

Lifecycle Snapshot

flowchart LR
    A[Determine amount to waive] --> B[Submit waive-interest command]
    B --> C[Interest receivable reduced]
    C --> D[Accruals and delinquency recalculated]

API Playbook

POST /v1/loans/{loanId}/transactions?command=waiveinterest
{
  "locale": "en",
  "dateFormat": "dd MMM yyyy",
  "transactionDate": "18 Oct 2025",
  "transactionAmount": 42.75,
  "note": "Interest waived for outage",
  "externalId": "WI-2025-10-18-OUTAGE"
}

Key validations

• Loan must be in a status that allows waivers (Active/Overpaid depending on product).
• transactionDate cannot be in the future or before the last user transaction.
• Amount must be positive; Embarc automatically splits it between receivable interest and unrecognized income if periodic accrual is enabled.
• Waive Interest uses the same payment allocation order configured on the loan product. If principal is prioritized ahead of interest, reorder the allocation before waiving or, on Dynamic loans, configure the Payment Waiver allocation and use Interest Payment Waiver instead.

Tips for Operations Teams

• Use note/externalId to reference the internal case or approval (e.g., customer complaint ticket).
• After waiving significant amounts, regenerate payoff quotes if the borrower plans to settle—the waiver reduces the payoff obligation.
• Waiving interest does not claw back amounts already collected; it simply reduces whatever interest remains outstanding on the requested date.

Baseline Example (Fixed Loan A)

Baseline A installment #5 (13 May 2026) carries USD 81.58 interest and USD 984.60 principal. Waiving the full USD 81.58 on 10 May 2026 results in:

Remaining installments stay at USD 1,066.19 because the waived interest is not reallocated; it simply lowers the borrower’s obligation for that due date. If partial waivers are posted (e.g., USD 40.00), only that portion of the interest line is removed and the residual interest remains collectible.

Transactions created

Loan summary delta (Baseline A)

Accounting snapshot

For periodic accrual products, the command splits the waiver between receivable and unrecognized income automatically.

Verification checklist

1. GET /v1/loans/{loanId}?associations=repaymentSchedule,loanSummary,transactions before/after. Confirm:
   • loanSummary.interestOutstanding decreases by USD 81.58.
   • Installment #5’s interestDue is zero in the schedule.
2. Review transactions[] for the WAIVE_INTEREST entry with the correct amount and note.
3. If interest recalculation is enabled, run your Close of Business/accrual job and verify no leftover accrual entries remain for installment #5.

Sandbox request template

POST /v1/loans/{{baselineFixedLoanId}}/transactions?command=waiveinterest
{
  "locale": "en",
  "dateFormat": "dd MMM yyyy",
  "transactionDate": "10 May 2026",
  "transactionAmount": 81.58,
  "note": "Billing adjustment – installment 5",
  "externalId": "WI-BL-A-0001"
}

Use the ID of your Baseline A clone for {{baselineFixedLoanId}}, then follow the checklist above.