In case the customer pays a single or multiple installment amounts before it is due, then the system applies the amount as per the appropriation sequence and any excess over and above that is stored as RPA - Repayment pending appropriation.
Which means that the customer does not get any interest benefit for the same. On the next due date the system uses the RPA amount for satisfying the arrears.
Any shortfall is then recovered from the CASA account (if a CASA draw down is set up), If there are no outstanding arrears then the entire payment is stored in the RPA. Thus the customer only gets the advantage of his arrears getting knocked off in time avoiding any penalty. RPA does not also result in the term or the installment getting reduced as the outstanding does not come down nor does the interest base. In Advance payment the system reduces the interest base on the same day (as defined in the schedule Type) thereby bringing down the interest burden as in case of partial payoff and also stores the advance amount as RPA (principal and interest RPA). Thus like in case of RPA the system recovers the principle and interest arrears on the due date. Thus the salary draw down set on a date before the due date of payment gets the advantage of advance payment as the system recovers the arrears of the next cycle.
RPA maybe widely used in Advanced repayment, which is not widely used.
Which means that the customer does not get any interest benefit for the same. On the next due date the system uses the RPA amount for satisfying the arrears.
Any shortfall is then recovered from the CASA account (if a CASA draw down is set up), If there are no outstanding arrears then the entire payment is stored in the RPA. Thus the customer only gets the advantage of his arrears getting knocked off in time avoiding any penalty. RPA does not also result in the term or the installment getting reduced as the outstanding does not come down nor does the interest base. In Advance payment the system reduces the interest base on the same day (as defined in the schedule Type) thereby bringing down the interest burden as in case of partial payoff and also stores the advance amount as RPA (principal and interest RPA). Thus like in case of RPA the system recovers the principle and interest arrears on the due date. Thus the salary draw down set on a date before the due date of payment gets the advantage of advance payment as the system recovers the arrears of the next cycle.
RPA maybe widely used in Advanced repayment, which is not widely used.