ftr_edit, change of interest rate for term loan

[Former Member]

Hi Friends,

I have not worked on Treasury and so I would like toknow the repurcussions of change of percentage rate.

On a (particular) term loan there is a change in interest rate from 16% to 13% and the user is not able to change the interest rate as it is in a display mode in FTR_EDIT. Would we be able to change the interest rate in the said T.Code or is it a setting else where.

Any suggestions would be highly appreicated.

Regards

Soujanya

[Former Member · Accepted solution]

Hi,

The user will not able to change the interest %, if the interest amount is already posted in TBB1. If that is the case, then go the cash flow tab in FTR_EDIT, reverse the interest rate flow and then you will be able to change the interest %. You have to post the document for reversed interest rate flow in TPM10 and the new interest rate flow in TBB1.

Are you managing loans through money market module?

Regards,

Ravi

[Former Member · Accepted solution]

Hi,

Thnx for replying. Yes, we are managing loans through money market module.

I'm not able to check the given solution as I'm not in front of the system. However, I would like to know if we reverse rate flow, wouldn't there by any issue with the existing amount.

In a nutshell I could say that the earlier interest rate has to be @ 16% and the corresponding cash flow has to be accordingly however from next month the cash flow has to update the values according to the changed 13% and not 16%.

Regards,

Soujanya

[Former Member · Accepted solution]

Hi,

Ok. Got your requirement. Then you should not change the interest rate.

What you have to do is have a variable interest rate instead of fixed interest rate. Create an interest rate adjustment condition type in customizing and assign it to the transaction type.

While creating the transaction, instead of specifying the interest amount, specify the reference interest rate like LIBOR etc.

Then at every interest period you can do interest rate adjustment by either entering the interest rate manually in TI10, or maintain a value for the reference interest rate and doing automatic interest rate adjustment in TJ05.

Regards,

Ravi

[Former Member · Accepted solution]

Another way to change interest rate in already disbursed transaction:

1. Press "Condition" button (shift+F6) under FTR_EDIT - you will see all relevant conditions of your transaction

2. Double click on the interest condition to be changed.

3. Press "Copy" button (F5)

4. Enter the effective date from which interest condition have to be changed

5. Enter all necessary data for the new interest condition record

After completing all these steps you will get a new interest condition effective from date which you have entered and cash flow will be calculated depended on the new interest rate from new effective date

[Former Member · Accepted solution]

Hi ,

Thnx for the answer. This is exactly what I wanted.

Hi Ravi,

Thank you for replying as well.

Regards

Soujanya