Creating a Loan

Overview

A loan in Lendiom represents a real loan. It can represent an owner-financed loan, a cash loan or any arrangement where a sum of money is owed and expected to be repaid with or without interest. This guide walks you through the six steps of creating a loan.

Step 1: What & Who

The first step is telling the system what the loan is for and who it is for. When creating a loan:

The Loan Status starts as Draft. After saving the loan you can activate it via the Action Center.
Select a Loan Type (Cash, Tract of Land, or Residential). Choosing Tract of Land allows you to select one or more land tracts; choosing Residential lets you select a residential inventory.
Select the Client who will be paying back the loan. You can choose an existing client or create a new one.
Specify a Loan Label for easy reference; Lendiom auto-generates a label based on the loan type, tract and client, but you can customize it.

Below is a screenshot of the first step:

Step 2: Terms

Set the key terms of the loan:

Closing Date: the date papers are or will be signed (for record keeping).
First Payment Date: the date of the first payment; it determines future due dates.
Late Fees Applied: whether late fees are charged automatically or manually.
Late Fee Tiers: defines how late fees are calculated (see the late fees guide).
Days Until In-Default: number of days after the due date before the loan enters in-default status; required.
Defaults After: when a loan escalates from in-default to defaulted status (if automatic in-defaulting is enabled).

Step 3: How Much

The third step defines the financial details:

Sales Price: the initial price before any down payment.
Down Payment: amount the buyer is putting down; down payments can be collected via Lendiom (requires PayArc).
Amount Financed: automatically calculated as Sales Price minus Down Payment.
Interest Rate: fixed interest rate for the loan.
Interest Schedule: choose whether interest Accrues Daily (calculates interest based on days since last payment) or Follows Payment Schedule (amortization schedule).
Length: how long the loan will be financed, in years or months.
Monthly Payment: calculated based on the terms; you can override with a higher custom amount.
Extra Payment Application: choose where extra amounts go — either toward Principal or toward the Next Payment.
New or Existing Loan: toggling to Existing reveals additional inputs for pre-existing loans (see the Creating a Pre-Existing Loan guide).

Step 4: Communication

Configure how you communicate with the client and enable online payments:

Automated Communication: choose whether notifications (SMS messages) are sent automatically or manually. A Communication Portal is required to send SMS.
Communication Preference: currently only SMS is supported; the client must have a mobile number.
Online Payments: enable clients to pay their loan via Lendiom Pay (PayArc account required after December 2024).
Statement Descriptor: what appears on the client’s bank statement (5–22 characters).
Platform Fee Payee: select who pays the platform fee (Buyer, Seller or Split 50/50).
Allow Principal Only: enable clients to make principal-only payments.
Allow Auto Draft: allow clients to set up automatic payments.

Step 5: Escrow

Escrow refers to regular payments for taxes, insurance or other fees. Configure escrow if needed:

Collect Escrow: yes/no toggle to collect escrow (defaults to No).
Escrow Starting Balance: the existing balance in the escrow account (used for pre-existing loans).
Escrow Payment Amount: the monthly amount collected toward escrow (added to the monthly payment).
Escrow Application Step: determine when escrow is applied during payment — Before Interest or After Principal.

Step 6: Review

The final step displays all of your inputs and the generated amortization schedule. Review everything carefully and click Save when you are satisfied. After saving, you can activate the loan from the Action Center.