Refunds

Single premium insurance products are computed up front, and the premiums computed are usually added to the principal balance and hence are financed along with the amount the borrower has requested. These premiums are calculated with the assumption that the loan will be paid off as scheduled. If a loan is paid off early, then the borrower is often due a refund of the pre-computed premiums (hereafter, simply called a refund).

This module allows the calling application to compute the refund amounts for credit life, disability, involuntary unemployment, and personal property insurances. Refund calculations depend on setup file settings that are stored in the refund setup file (ref####.ini), where #### is a four-digit number from 0000 to 9999. Proper configuration of the refund setup file is necessary to produce expected results.

Sample Request

The following is a sample SCEX request for a refund calculation, where the original equal payment loan was originated on June 6, 2015 with a first payment date of July 1, 2015. The loan term was scheduled for 60 months, with a maturity date of June 1, 2020. Single credit life and disability were written on the loan, with premium amounts of $355.06 for life and $411.34 for disability. The computed equal payment was $228.52. Assuming that the borrower pays off the loan on the date of the 36th payment (June 1, 2018), the refund XML request would look as follows:

<?xml version="1.0" encoding="UTF-8" standalone="no"?>
<!DOCTYPE inREFUND SYSTEM "inREFUND.dtd">
<inREFUND Account="1" DataDirPath="C:\SCEX\" LoanType="equal" PPY="monthly">
  <LoanDate>2015-06-06</LoanDate>
  <RefundDate>2018-06-01</RefundDate>
  <PmtDate>2015-07-01</PmtDate>
  <IntRate>10.000</IntRate>
  <Term>60</Term>
  <Payment>228.52</Payment>
  <Balloon>228.52</Balloon>
  <CL Premium="355.06" ScheduledPmts="60" PremiumMethod="net" CoverageType="single" />
  <AH Premium="411.34" ScheduledPmts="60" CoverageType="single" Plan="0" />
</inREFUND>

Sample Response

The following is a sample response generated by the previous sample request:

<?xml version="1.0" standalone="no" ?>
<!DOCTYPE outREFUND SYSTEM "outREFUND.dtd">
<outREFUND>
  <CalcResult Code="0">Successful Calculation</CalcResult>
  <TotalRefund>306.56</TotalRefund>
  <CLRefund RemainingPmts="24">142.02</CLRefund>
  <AHRefund RemainingPmts="24">164.54</AHRefund>
</outREFUND>