Credit Products
What is a Credit Product?
A Credit Product defines the lending terms, conditions, and parameters for a specific loan offering. It acts as a template that sets allowable ranges for loan amounts, interest rates, terms, fees, and eligibility criteria.
Credit Product Capabilities
Product Parameters:
Minimum and maximum loan amounts
Available loan terms (duration in months)
Interest rate ranges (fixed or variable)
Fees and charges structure
Collateral requirements
Eligibility criteria
Product Variations:
Multiple Additives for market segments
Promotional rate offerings
Seasonal product variations
Channel-specific products (online vs branch)
Offer Generation:
Dynamic offer calculation using Offer Engine
Personalized rate determination
Term and amount recommendations
Real-time offer presentation
Product Controls:
Product availability periods
Application limits per customer
Maximum exposure per product
Geographic restrictions
Product Structure
Base Product Definition
Product Name: Identifier for the offering (e.g., "Personal Loan", "Auto Loan")
Product Type:
Consumer Lending (personal loans, auto loans)
Business Lending (SME loans, working capital)
Secured Lending (mortgage, asset-backed)
Revolving Credit (credit lines)
Loan Parameters:
Amount Range: $1,000 - $50,000
Term Options: 6, 12, 24, 36, 48 months
Interest Rate: 5.99% - 24.99% APR
Origination Fee: 1% - 3%
Late Payment Fee: $25Additives
Additives create product variations for different customer segments without creating entirely new products. See Additives for details.
Example Additives:
"Premium Customer" (lower rates for high credit scores)
"First-Time Borrower" (flexible terms for new customers)
"Employee Loan" (special rates for bank staff)
Product Configuration Process
Step 1: Define Product Parameters
Set the fundamental terms:
Loan amount minimums and maximums
Available term lengths
Interest rate methodology (fixed/variable)
Fee structure
Required collateral types
Step 2: Set Eligibility Rules
Define who qualifies:
Minimum age (typically 18 or 21)
Income requirements
Employment status
Credit score thresholds
Residency requirements
Existing customer relationships
Step 3: Configure Document Requirements
Specify required documents:
Identity verification documents
Income proof (salary slips, bank statements)
Collateral documents (if secured)
Additional documents by role (guarantor documents)
Step 4: Link to Workflows
Connect assessment logic:
Credit assessment workflow
Income verification workflow
Collateral valuation workflow
Fraud detection workflow
Step 5: Set Up Offer Engine Scripts
Configure dynamic offer calculation:
Rate determination logic
Amount approval calculation
Term recommendation rules
Personalization factors
Interest Rate Models
Products support different rate structures:
Fixed Rate
Single interest rate for entire loan term:
Rate set at origination
Predictable payments
No rate adjustment risk
Example: 8.5% APR for 36 months
Variable Rate
Rate adjusts based on index:
Base rate + margin
Periodic rate adjustments
Payment amount changes
Example: Prime + 3.5%, adjusted quarterly
Tiered Rate
Different rates for different conditions:
Rate varies by loan amount
Rate varies by credit score
Rate varies by term length
Example: 7.5% for excellent credit, 12.5% for fair credit
Promotional Rate
Special temporary rates:
Introductory period at lower rate
Then reverts to standard rate
Time-limited offers
Example: 0% APR for first 6 months, then 9.9%
Fee Structure
Products can include various fees:
Origination Fees:
Flat amount or percentage of loan
Charged at disbursement
Can be financed into loan
Example: 2% origination fee ($100 loan = $2 fee)
Service Fees:
Annual maintenance fees
Account management fees
Processing fees
Late Payment Fees:
Charged when payment overdue
Flat amount or percentage
Regulatory limits apply
Example: $25 per late payment
Prepayment Penalties:
Charge for early payoff
Compensates for lost interest
Often time-limited (first 1-2 years)
Example: 3% of outstanding balance if paid off in first year
Other Fees:
Returned payment fees
Document reprint fees
Payment method fees
Statement fees
Product Lifecycle
Active Products
Currently offered to new applicants:
Visible in application portals
Available for staff to select
Included in marketing materials
Offer Engine generates offers
Inactive Products
No longer offered but existing loans continue:
Not available for new applications
Existing loans continue servicing
Historical reporting includes inactive products
Cannot be reactivated (create new version instead)
Product Versions
When product terms change significantly:
Create new version
Previous version becomes inactive
Clear audit trail of changes
Existing loans remain on old version
Product Compliance
Products must comply with regulations:
Interest Rate Caps:
Maximum APR allowed by jurisdiction
Usury law compliance
Military lending limits (36% APR cap for active military)
Disclosure Requirements:
Truth in Lending Act (TILA) compliance
APR calculation accuracy
Fee transparency
Prepayment rights disclosure
Fair Lending:
Non-discriminatory pricing
Consistent eligibility criteria
Documented approval standards
Implementation Resources
Through SDK (Development team)
Product Entity: Offer Engine & Credit Products - Define product structure
Schedule Engine: Offer Engine & Credit Products - Configure payment schedule calculation
Rate Calculation: Credit Management System - Implement interest calculation logic
Through Admin Panel
Product Creation: Credit Products and Pricing - Create and configure products
Additive Configuration: Credit Products and Pricing - Set up product variations
Offer Engine: Credit Products and Pricing - Configure offer generation scripts
Related Topics
Additives - Product variations for customer segments
Offer Engine - Dynamic offer generation
Loan Origination - Product selection in origination
Collateral Configuration - Secured product setup
TimveroOS: Configurable lending product templates
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