Loan Reschedule Transaction

Overview

A Loan Reschedule (also called Loan Restructuring or Loan Modification) is a transaction where the terms of an existing loan are modified to help a borrower who is experiencing financial difficulty. This typically involves extending the loan term, reducing the interest rate, or changing the repayment schedule.

Key Characteristics

Purpose: Modify loan terms to avoid default and support borrower recovery
Transaction Type: RSCH (Reschedule)
Complexity: Very High - Creates new schedule while preserving old schedule history
Multi-Entity Impact: LoanAccount, old LoanSchedules (SUPERSEDED), new LoanSchedules (ACTIVE)
Critical Requirement: Old schedule supersession with full audit trail, new schedule creation

Reschedule vs Other Loan Transactions

Aspect	Reschedule	Refinance	Write-Off
Loan Account	Same loan modified	New loan created	Loan removed from books
Outstanding Balance	Preserved	Transferred to new loan	Written off
Schedule	Old SUPERSEDED, new ACTIVE	Old closed, new created	All WRITTEN_OFF
Purpose	Help struggling borrower	Better terms/consolidation	Recognize bad debt
Payment History	Preserved	Starts fresh	Ended

Transaction Flow

Entities Impacted

Scenario 1: Term Extension with Rate Reduction

Context:

Loan: NGN 1,000,000 principal, 22% annual interest, 36 months
Current Status: 18 months paid, NGN 500,000 principal remaining
Financial Hardship: Borrower income reduced by 40%
Current Monthly Payment: NGN 55,000
Restructure Request: Extend to 48 months total (30 remaining), reduce rate to 18%

Old Schedule:

18 schedules paid (1-18): NGN 55,000/month
18 schedules outstanding (19-36): ACTIVE, NGN 55,000/month each

New Schedule Calculation:

Outstanding Balance = 500,000 (principal) + 90,000 (accrued interest) = 590,000
New Interest Rate = 18% (reduced from 22%)
New Term = 30 months (extended from 18 remaining)
New Monthly Payment = 590,000 / 30 + (590,000 Ã— 0.18 / 12) = 19,667 + 8,850 = 28,517

Restructuring Fee = 1% of outstanding = 5,900
```text
**Entities Impacted** (32 ImpactedEntity records):

```typescript
{
  transactionId: "RSCH-001",
  transactionType: "Loan Reschedule",
  rescheduleDate: "2025-12-28",
  rescheduleReason: "Borrower income reduced 40%, requesting payment relief",
  impactedEntities: [
    
    // 1-18: Old Schedule Supersession (18 outstanding schedules)
    // Schedule 19 (example)
    {
      entityType: "LoanSchedule",
      entityId: 219,
      entityKey: "SCH-219",
      fieldName: "State",
      oldValue: "ACTIVE",
      newValue: "SUPERSEDED",
      deltaAmount: 0
    },
    {
      entityType: "LoanSchedule",
      entityId: 219,
      fieldName: "SupersededDate",
      oldValue: null,
      newValue: "2025-12-28",
      deltaAmount: 0
    },
    {
      entityType: "LoanSchedule",
      entityId: 219,
      fieldName: "SupersededByTransactionId",
      oldValue: null,
      newValue: "RSCH-001",
      deltaAmount: 0
    },
    // ... (17 more old schedules, each with 3 field changes = 51 records)
    
    // 19-48: New Schedule Creation (30 new schedules)
    // New Schedule 1 (example)
    {
      entityType: "LoanSchedule",
      entityId: 501,  // New ID
      entityKey: "SCH-501",
      fieldName: "ScheduleNumber",
      oldValue: null,
      newValue: "19",  // Continues from old schedule numbering
      deltaAmount: 0
    },
    {
      entityType: "LoanSchedule",
      entityId: 501,
      fieldName: "DueDate",
      oldValue: null,
      newValue: "2026-01-28",
      deltaAmount: 0
    },
    {
      entityType: "LoanSchedule",
      entityId: 501,
      fieldName: "PrincipalDue",
      oldValue: null,
      newValue: 19667.00,
      deltaAmount: +19667.00
    },
    {
      entityType: "LoanSchedule",
      entityId: 501,
      fieldName: "InterestDue",
      oldValue: null,
      newValue: 8850.00,
      deltaAmount: +8850.00
    },
    {
      entityType: "LoanSchedule",
      entityId: 501,
      fieldName: "State",
      oldValue: null,
      newValue: "ACTIVE",
      deltaAmount: 0
    },
    {
      entityType: "LoanSchedule",
      entityId: 501,
      fieldName: "CreatedByTransactionId",
      oldValue: null,
      newValue: "RSCH-001",
      deltaAmount: 0
    },
    // ... (29 more new schedules, each with 6 field changes = 174 records)
    
    // 49-55: LoanAccount impacts
    {
      entityType: "LoanAccount",
      entityId: 101,
      entityKey: "LOAN-101",
      fieldName: "InterestRate",
      oldValue: 22.00,
      newValue: 18.00,
      deltaAmount: -4.00
    },
    {
      entityType: "LoanAccount",
      entityId: 101,
      fieldName: "TermMonths",
      oldValue: 36,
      newValue: 48,
      deltaAmount: +12
    },
    {
      entityType: "LoanAccount",
      entityId: 101,
      fieldName: "MaturityDate",
      oldValue: "2026-12-15",
      newValue: "2028-12-28",
      deltaAmount: 0
    },
    {
      entityType: "LoanAccount",
      entityId: 101,
      fieldName: "RescheduleCount",
      oldValue: 0,
      newValue: 1,
      deltaAmount: +1
    },
    {
      entityType: "LoanAccount",
      entityId: 101,
      fieldName: "LastRescheduleDate",
      oldValue: null,
      newValue: "2025-12-28",
      deltaAmount: 0
    },
    {
      entityType: "LoanAccount",
      entityId: 101,
      fieldName: "MonthlyInstallment",
      oldValue: 55000.00,
      newValue: 28517.00,
      deltaAmount: -26483.00
    },
    {
      entityType: "LoanAccount",
      entityId: 101,
      fieldName: "ScheduleCount",
      oldValue: 36,
      newValue: 48,  // 18 paid + 30 new
      deltaAmount: +12
    },
    
    // 56-57: GL Account impacts (restructuring fee)
    {
      entityType: "GLAccount",
      entityKey: "4106-LOAN-RESTRUCTURING-INCOME",
      fieldName: "CreditAmount",
      deltaAmount: +5900.00
    },
    {
      entityType: "GLAccount",
      entityKey: "2101-CUSTOMER-DEPOSITS",
      fieldName: "DebitAmount",
      deltaAmount: +5900.00  // Deducted from customer account
    }
  ]
}
```text
**Key Point**: Old schedule 19-36 marked SUPERSEDED (not deleted), new schedule 19-48 created as ACTIVE. Payment history on schedules 1-18 preserved.

---

## Reschedule Calculation Algorithm

:::warning[Code Removed]
**Implementation details removed for security.**

Contact support for implementation guidance.
:::text
---

## Reschedule Execution

:::warning[Code Removed]
**Implementation details removed for security.**

Contact support for implementation guidance.
:::text
---

## Best Practices

### For Product Managers

1. **Reschedule Policy**:
   - Define clear eligibility criteria (financial hardship documentation)
   - Limit reschedules per loan (e.g., maximum 2 reschedules)
   - Set restructuring fees (typically 1-2% of outstanding balance)

2. **Risk Management**:
   - Track reschedule count per borrower (indicator of credit risk)
   - Monitor NPL rates for rescheduled loans
   - Provisioning requirements may increase for rescheduled loans

3. **Customer Support**:
   - Offer payment relief without harming credit history
   - Balance bank profitability with customer retention
   - Communicate new terms clearly

### For Developers

1. **Schedule Supersession**:
   - NEVER delete old schedules (audit trail required)
   - Mark old schedules as SUPERSEDED with link to reschedule transaction
   - Preserve all payment history on paid schedules

2. **Impact Tracking**:
   - Track EVERY old schedule supersession
   - Track EVERY new schedule creation
   - Link old and new schedules via transaction ID

3. **Concurrent Safety**:
   - Lock loan account during reschedule
   - Verify no payments pending on old schedules
   - Use database transactions

### For Bank Operations

1. **Approval Process**:
   - Credit committee review required
   - Verify financial hardship documentation
   - Assess borrower's ability to service new terms

2. **Documentation**:
   - Signed reschedule agreement from borrower
   - Updated loan contract with new terms
   - Notification of new payment schedule

3. **Monitoring**:
   - Track performance of rescheduled loans
   - Early warning if second reschedule needed
   - Provisioning requirements

---

## V2 API Commands

### Architecture Overview

The V2 loan reschedule command follows the **Delegation Pattern**:

- **V2 Facade**: `InitiateLoanRescheduleCommand` (BPMCore compatible)
- **V1 Implementation**: Delegates to existing V1 `LoanRescheduleCommand` with full business logic
- **BPM Integration**: Accepts parameters via `BpmUtil.GetPropertyValue()`

**Implementation**: `CB.Administration.Api/Commands/BPMCore/Loans/AdministrationCoreLoanCommandHandlers.Transactions.cs`

---

### InitiateLoanRescheduleCommand

**Purpose**: Reschedule loan payment terms (modify schedule, extend term, adjust amount)

**Command**: `InitiateLoanRescheduleCommand`

**Delegation**: â†’ `LoanRescheduleCommand` (V1 implementation)

#### BPM Parameters

```json
{
  "commandName": "InitiateLoanRescheduleCommand",
  "data": {
    "accountEncodedKey": "string (mandatory)",
    "clientEncodedKey": "string (mandatory)",
    "newTermMonths": "int (optional)",
    "newInstallmentAmount": "decimal (optional)",
    "rescheduleReason": "string (optional)",
    "transactionDate": "DateTime (optional)",
    "notes": "string (optional)"
  }
}

Parameter Details

Parameter	Type	Required	Description
`accountEncodedKey`	string	âœ… Yes	Loan account to reschedule
`clientEncodedKey`	string	âœ… Yes	Client/borrower encoded key
`newTermMonths`	int	âŒ No	New loan term in months
`newInstallmentAmount`	decimal	âŒ No	New installment amount
`rescheduleReason`	string	âŒ No	Reason code (e.g., "FINANCIAL_DIFFICULTY")
`transactionDate`	DateTime	âŒ No	Reschedule date (defaults to today)
`notes`	string	âŒ No	Reschedule notes/remarks

Impact

Loan Account:

âœ… Old schedules closed/modified
âœ… New schedules generated with revised terms
âœ… Loan term extended (if applicable)
âœ… Installment amount reduced (if applicable)
âœ… Reschedule history tracked

Example Response

{
  "isSuccessful": true,
  "transactionId": "TXN-LOAN-RSCH-20251229-0001",
  "transactionState": "SETTLED",
  "message": "Loan rescheduled successfully",
  "data": {
    "loanAccountKey": "8a8080827f23loan017f23def456",
    "oldTermMonths": 36,
    "newTermMonths": 48,
    "oldInstallmentAmount": 50000.00,
    "newInstallmentAmount": 37500.00,
    "schedulesModified": 24,
    "schedulesCreated": 12
  }
}

Implementation Checklist

Phase 1: Calculation

Implement CalculateRescheduleTermsAsync
Add schedule generation for new terms
Calculate restructuring fees
Unit tests (5+ scenarios)

Phase 2: Execution

Implement ProcessLoanRescheduleAsync
Add old schedule supersession logic
Add new schedule creation
Integration tests

Phase 3: API

Create reschedule calculation endpoint
Create reschedule execution endpoint
Add validation rules
API tests

Phase 4: Testing

End-to-end tests (3+ scenarios)
Audit trail verification
Production deployment

Developer Resources

For API implementation details, see:

Document Version: 1.0
Last Updated: December 28, 2025
Related Documents:

Overview​

Key Characteristics​

Reschedule vs Other Loan Transactions​

Transaction Flow​

Entities Impacted​

Scenario 1: Term Extension with Rate Reduction​

Parameter Details​

Impact​

Example Response​

Implementation Checklist​

Phase 1: Calculation​

Phase 2: Execution​

Phase 3: API​

Phase 4: Testing​

Developer Resources​