Loan Payments

Loan payments move funds from a Column bank account to a loan object, reducing total principal receivable and interest receivable on a loan object. To make a loan payment from an external account, funds must first be transferred to a Column bank account. They can then be applied to a loan with a loan payment.

Principal and Interest Payments

Our Loan Payment API enables you to specify the principal payment portion and interest payment portion of a loan payment:

If you set the field amount but do not set the field principal_amount, we will apply the payment amount to pay off outstanding interest first, and then apply the remaining amount to outstanding principal receivable.
If you set the field principal_amount but do not set the field amount, we will apply the whole payment amount to pay down principal receivable.
If you set both the field amount and the field principal_amount, we will apply the amount principal_amount to the outstanding principal receivable, and the remaining amount to the outstanding interest receivable. If the remaining amount is more than the outstanding interest receivable, we will return 400 errors as interest receivable cannot be overpaid.

Case	`amount`	`principal_amount`	Rules
Auto	✔	✖	Pay off interest first, and apply remaining to principal
Principal-only	✖	✔	Pay off principal only
Fixed	✔	✔	Apply `principal_amount` to principal, and `amount - principal_amount` to interest

Note

If a loan is partially owned by Column, and partially owned by your platform, we will split the payment amount in a pro-rata manner between Column and your platform.

If you want to apply a payment to principal and interest receivables sold to your platform only, you may set the field ignore_retained_balances to true when you create a loan payment.

Online and Offline Payments

Our Loan Payment API also enables you to specify online and offline payments by setting the field is_offline when you create loan payments.

Online Payments: For payments collected via Column (e.g. via outgoing ACH debit), you may apply payment from any account by specifying a specific bank account ID when you create a loan payment. Based on overall and retained balances, we will pro-rate payments and move funds from the specified bank account to your collections account (specified by collection_account_number_id in the loan program configuration).
Offline Payments: For offline payments collected by your platform away from Column, if a loan is 100% owned by your platform, you do not need to specify a source account. We will only update the principal receivable and interest receivable in our ledger. No funds will be moved to your collections account. However, if a loan is partially or completely owned by Column, you will need to specify a bank account from which to make a loan payment for the portion owned by Column. No funds will be moved to your collections account.

For example, given the following loan of which Column has sold 80% to your platform:

Principal receivable: $200 retained by Column, and $800 owned by your platform
Interest receivable: $10 retained by Column, and $40 owned by your platform

For a $200 online payment, you will need to prefund a source account with $200:

Interest payments: $10 to Column and $40 to your platform
Principal payment: $30 to Column and $120 to your platform
$160 will be moved from the source account to the collection account defined on the loan program

For a $200 offline payment, you will need to prefund a source account with $40:

No funds are moved from the source account to your collections account