Flexible pricing (dynamic fees) on early repayment means that the Payer can take advantage of paying early and reducing fees in case the agreement and cash flow allows for that. If the payer pays earlier, the system recalculates the repayment amount in direct proportion to the number of days passed from the moment of investment to the moment of actual payment. The Finverity platform administrator can
enable or disable this functionality on the payer level.
For example, a $10,000 invoice with a 10% interest rate for a 90 day tenor will have a repayment amount of $10,250 at the repayment date.
Example - Repaying at the repayment date
Face Value
| 10,000.00
|
Tenor
| 90
|
Interest rate
| 10%
|
Interest payment due at end of term
| 250
|
Total repayment value
| 10,250.00
|
If the Payer decides to repay after 75 days, they can select the interest payable to be recalculated based on the balance being outstanding for 75 days instead of 90, and the repayment amount at that point will be $10,208.
Example - Early repayment with flexible pricing
Face Value
| 10,000.00
|
Tenor
| 75
|
Interest rate
| 10%
|
Interest payment due at end of term
| 208.33
|
Total repayment value
| 10,208.33
|