Loan management system and method

Abstract

A loan management system and method includes an alternative repayment amortization method. Each installment on repayment of the loan includes an equal fixed principal repayment amount and an interest amount. The equal fixed principal repayment amount is based on the amount of the loan and the number of installments to be paid over the life of the loan. The interest due for each installment is based on the interest rate and the amount of outstanding principal at the time a given installment is due.

1 . A loan product comprising:
 a principal amount;   an interest rate;   a predetermined number of repayment installments;   a fixed principal repayment amount, wherein the fixed principal repayment amount is determined by dividing the principal amount by the number of repayment installments, and wherein the principal amount is reduced by the fixed principal repayment amount after each repayment installment; and   an interest payment amount based on the amount of principal remaining, the interest rate and the number of repayment installments.   
     
     
         2 . The loan product of  claim 1  further comprising an installment payment wherein the installment payment includes a fixed principal repayment amount and an interest payment amount. 
     
     
         3 . The loan product of  claim 1  wherein the interest payment amount is determined by: (a) prorating the interest rate by the number of repayment installments to determine a prorated interest rate, and (b) multiplying the prorated interest rate by the principal remaining to determine the interest payment. 
     
     
         4 . The loan product of  claim 3  further comprising an installment payment wherein the installment payment includes a fixed principal repayment amount and an interest payment amount. 
     
     
         5 . A loan management system comprising:
 one or more terminals operable to act as a client on a network;   a computer operable to act as a server on the network and to communicate with each of the participant terminals over the network, the computer comprising:
 a memory configured to store a set of instructions; and 
 a processor configured to execute the set of instructions, wherein the set of instructions cause the processor to: 
 receive a principal loan amount from at least one terminal; 
 receive an interest rate from at least one terminal; 
 receive a number of repayment installments from at least one terminal; 
 calculate a equal fixed principal repayment amount based on the principal loan amount and the number of repayment installments; 
 calculate an interest payment based on the principal, the interest rate and number of repayment installments; 
 calculate an installment amount by adding the equal fixed principal repayment amount and interest payment; 
 calculate a remaining principal amount by subtracting the fixed principal repayment amount from the principal loan amount; 
 calculate a subsequent interest payment based on the remaining principal amount, the interest rate and number of repayment installments; 
 calculate a subsequent installment amount by adding the equal fixed principal repayment amount and the subsequent interest payment; and 
 generate comparison information for display at least one terminal. 
   
     
     
         6 . The system of  claim 5  wherein the comparison information includes a chart showing at least one of a principal loan payment and interest payment in comparison to a traditional loan. 
     
     
         7 . The system of  claim 5  wherein the comparison information includes comparison metrics showing at least one of total accumulated interest paid, outstanding principal amount and accumulated principal paid at one or more predetermined periods in comparison to a traditional loan. 
     
     
         8 . The system of  claim 5  wherein the comparison information includes an amortization schedule showing the amount of each installment applied to the principal and interest payment in comparison to a traditional loan. 
     
     
         9 . A computer implemented method of converting a traditional loan to an alternative loan and managing said alternative loan, wherein the traditional loan includes a remaining loan balance principal, a number of remaining loan installments and an interest rate, wherein the method comprises:
 calculating an equal fixed principal repayment amount based on the remaining loan balance principal of the traditional loan and the number of remaining loan installments of the traditional loan;   calculating an interest payment based on the remaining loan balance principal of the traditional loan, the number of remaining loan installments of the traditional loan, and the interest rate of the traditional loan   calculating an installment amount by adding the equal fixed principal repayment amount and interest payment;   calculating a remaining principal amount by subtracting the fixed principal repayment amount from the principal loan amount;   calculating a subsequent interest payment based on the remaining principal amount, the interest rate and number of repayment installments; and   calculating a subsequent installment amount by adding the equal fixed principal repayment amount and the subsequent interest payment.   
     
     
         10 . The method of  claim 9  wherein the number of repayment installments is determined by multiplying the number of years for the loan by 12. 
     
     
         11 . The method of  claim 9  wherein the number of repayment installments is determined by multiplying the number of years for the loan by 4. 
     
     
         12 . The method of  claim 9  wherein the number of repayment installments is determined by multiplying the number of years for the loan by 2. 
     
     
         13 . The method of  claim 9  wherein the loan is a business loan. 
     
     
         14 . The method of  claim 9  wherein the loan is an automotive loan. 
     
     
         15 . The method of  claim 9  wherein the loan is a mortgage.