fineract-doc/src/docs/en/chapters/features/downpayment.adoc

= Downpayment

== Overview

Downpayment is a feature that allows a customer to make a partial payment at the time of loan application.
It is an initial instalment due the same day as the disbursement. Every disbursement initiates a downpayment.
The downpayment amount is then used to reduce the loan amount.

== Configuration

Downpayment can be configured in the loan product settings.

On the Settings tab there is a checkbox called 'Enable downpayment'.
Clicking on it brings up two attributes which can be set on downpayment:

* ‘Disbursed Amount percentage Down Payment’ - mandatory field. Here can be set that how many percent of the Disbursed amount will be the actual downpayment.
* ‘Enable Auto Repayment for Down Payment’ - optional, checkbox. If enabled, downpayment will be automatically paid on raising.

== Scope

Downpayment can be applied both for Loan products with Loan schedule type: cumulative and progressive.

Loans with or without interest can have downpayment.

== Usage

Downpayment can be used in the loan application process.

When a new Loan is created with a Loan Product that has downpayment enabled, the downpayment amount is calculated based on the 'Disbursed Amount percentage Down Payment' attribute.

In the Repayment schedule the downpayment is shown as a separate instalment due on the same day as the disbursement. If 'Enable Auto Repayment for Down Payment' is enabled, the downpayment will be automatically paid on raising.

Downpayment does not count as an installment in the context that upon loan creation if X installments set, then the downpayment will be the first (initial) installment followed by X regular installments.

If the downpayment is not paid on time, it will be marked as overdue the same way as a regular installment.

Reversing a disbursement also rolls back the associated downpayment transaction.

Charges due on dowpayment date will be added to the first installment, not to the downpayment.

In case of interest bearing loan, interest will not be realised on downpayment.

== Example

We have a progressive Loan product, with disbursed amount 100, 7% annual interest rate, 6 installments and 25% downpayment with auto repayment enabled.

Repayment schedule on disbursement day:

[cols="1,1,3,3,2,2,2,1,1,1,1,1,1,1", options="header"]
|===
| Nr
| Days
| Date
| Paid date
| Balance of loan
| Principal due
| Interest
| Fees
| Penalties
| Due
| Paid
| In advance
| Late
| Outstanding

| 
| 
| 01 January 2024
| 
| 100.0
| 
| 
| 0.0
| 
| 0.0
| 0.0
| 
| 
| 

| 1
| 0
| 01 January 2024
| 01 January 2024
| 75.0
| 25.0
| 0.0
| 0.0
| 0.0
| 25.0
| 25.0
| 0.0
| 0.0
| 0.0

| 2
| 31
| 01 February 2024
| 
| 62.68
| 12.32
| 0.44
| 0.0
| 0.0
| 12.76
| 0.0
| 0.0
| 0.0
| 12.76

| 3
| 29
| 01 March 2024
| 
| 50.29
| 12.39
| 0.37
| 0.0
| 0.0
| 12.76
| 0.0
| 0.0
| 0.0
| 12.76

| 4
| 31
| 01 April 2024
| 
| 37.82
| 12.47
| 0.29
| 0.0
| 0.0
| 12.76
| 0.0
| 0.0
| 0.0
| 12.76

| 5
| 30
| 01 May 2024
| 
| 25.28
| 12.54
| 0.22
| 0.0
| 0.0
| 12.76
| 0.0
| 0.0
| 0.0
| 12.76

| 6
| 31
| 01 June 2024
| 
| 12.67
| 12.61
| 0.15
| 0.0
| 0.0
| 12.76
| 0.0
| 0.0
| 0.0
| 12.76

| 7
| 30
| 01 July 2024
| 
| 0.0
| 12.67
| 0.07
| 0.0
| 0.0
| 12.74
| 0.0
| 0.0
| 0.0
| 12.74
|===