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ZCALC.MAN
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1994-10-12
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Instruction Manual
ZCALC
Regulation Z
Installment Loan Calculator
Installment Loan Writer
Vers 2.00
Copyright
Bottom Line Software
P. O. Box 118826
Carrollton, Texas 75011-8826
214-394-4087
October 1994
TABLE OF CONTENTS
License Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
What is Zcalc? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Installation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Disk contents . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Automatic Installation . . . . . . . . . . . . . . . . . . . . . . 4
Floppy Disk Instalation . . . . . . . . . . . . . . . . . . . . . . 5
Manual Installation . . . . . . . . . . . . . . . . . . . . . . . . 5
If You Can't Read the Screen . . . . . . . . . . . . . . . . . . . 6
Using Zcalc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
To Start the Program . . . . . . . . . . . . . . . . . . . . . . . 8
Screens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Menu Operations . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Using the Menus . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Selecting Menu Options . . . . . . . . . . . . . . . . . . . . . . 9
Pop Up Menus . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ZCALC Menu Functions . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Menu Hierarchy . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Entering Loan Data on the Screen . . . . . . . . . . . . . . . . . . . . 13
Loan Data Input Screen . . . . . . . . . . . . . . . . . . . . . . 13
Entering Dates . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Entering Numbers . . . . . . . . . . . . . . . . . . . . . . . . . 14
Entering the Interest Rate . . . . . . . . . . . . . . . . . . . . 14
Loan Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Calculating a New Loan . . . . . . . . . . . . . . . . . . . . . . 15
Recalculating the Prior Loan . . . . . . . . . . . . . . . . . . . 17
Single Payment Loans . . . . . . . . . . . . . . . . . . . . . . . 17
Texas Split Rate Loans . . . . . . . . . . . . . . . . . . . . . . 18
Precomputed Loan Payoff (Rule of 78ths) . . . . . . . . . . . . . . 18
APR Calculations . . . . . . . . . . . . . . . . . . . . . . . . . 21
APR Calculator Data Entry . . . . . . . . . . . . . . . . . . . . . 21
Gross Amount Financed . . . . . . . . . . . . . . . . . . . . . . . 21
Origination Fee . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Payment Streams . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Unit Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Basis, 360/365 . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Payment Amount . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Number of Payments . . . . . . . . . . . . . . . . . . . . . . . . 23
Periods to First Payment . . . . . . . . . . . . . . . . . . . . . 23
Odd Days to First Payment . . . . . . . . . . . . . . . . . . . . . 23
Multiple Payment Streams . . . . . . . . . . . . . . . . . . . . . 23
Financial Calculators . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Amount of Loan . . . . . . . . . . . . . . . . . . . . . . . . . . 24
i
Amount of Payment . . . . . . . . . . . . . . . . . . . . . . . . . 24
Number of Payments . . . . . . . . . . . . . . . . . . . . . . . . 25
Date Calculators . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Days Between Dates . . . . . . . . . . . . . . . . . . . . . . . . 27
Past or Future Dates . . . . . . . . . . . . . . . . . . . . . . . 27
Report Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Print Disclosure Report . . . . . . . . . . . . . . . . . . . . . . 28
Print Audit Report . . . . . . . . . . . . . . . . . . . . . . . . 30
Reading the Audit Report . . . . . . . . . . . . . . . . . . . . . 31
Checking ZCALC with the OCC's APR program. . . . . . . . . . . . . . . . 32
Definition of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Accrual Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
A&H Premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Amount of Final Payment . . . . . . . . . . . . . . . . . . . . . . 33
Balloon Payment Amount . . . . . . . . . . . . . . . . . . . . . . 33
Balloon Payment Number . . . . . . . . . . . . . . . . . . . . . . 33
Balloon Interest Payment . . . . . . . . . . . . . . . . . . . . . 34
Balloon Principal Payment . . . . . . . . . . . . . . . . . . . . . 34
Balloon Total Payment . . . . . . . . . . . . . . . . . . . . . . . 34
Credit Life and A/H Premium . . . . . . . . . . . . . . . . . . . . 34
Credit Life Insurance Premium . . . . . . . . . . . . . . . . . . . 34
Credit Life, Balloon Level Part . . . . . . . . . . . . . . . . . . 35
Credit Life, Balloon Decreasing Part . . . . . . . . . . . . . . . 35
Date of Note . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Date of First Payment . . . . . . . . . . . . . . . . . . . . . . . 35
Date of Maturity . . . . . . . . . . . . . . . . . . . . . . . . . 35
Days to First Payment . . . . . . . . . . . . . . . . . . . . . . . 35
Disclosure Rate (APR) . . . . . . . . . . . . . . . . . . . . . . . 36
Date of Last Payment . . . . . . . . . . . . . . . . . . . . . . . 36
Days to First Payment . . . . . . . . . . . . . . . . . . . . . . . 36
Days to Last Payment . . . . . . . . . . . . . . . . . . . . . . . 36
Fractional Period, per Reg Z . . . . . . . . . . . . . . . . . . . 37
Gross Amount Financed . . . . . . . . . . . . . . . . . . . . . . . 37
Income Collected Not Earned . . . . . . . . . . . . . . . . . . . . 37
Loan Number Renewed . . . . . . . . . . . . . . . . . . . . . . . . 37
Net Amount Financed . . . . . . . . . . . . . . . . . . . . . . . . 37
Number of Payments . . . . . . . . . . . . . . . . . . . . . . . . 37
Number of Payments Per Year . . . . . . . . . . . . . . . . . . . . 38
Odd Days to First Payment . . . . . . . . . . . . . . . . . . . . . 38
Odd Days Interest . . . . . . . . . . . . . . . . . . . . . . . . . 38
Official Fees Financed . . . . . . . . . . . . . . . . . . . . . . 39
Origination Fee - Points . . . . . . . . . . . . . . . . . . . . . 39
Payment Amount, Regular . . . . . . . . . . . . . . . . . . . . . . 39
Payment to Amortize the Amount Financed . . . . . . . . . . . . . . 39
Payment to Amortize Odd Days Interest . . . . . . . . . . . . . . 40
Payment to Amortize Prepaid Finance Charge . . . . . . . . . . . . 40
Payment Amount, Total . . . . . . . . . . . . . . . . . . . . . . . 40
Payments Per Year . . . . . . . . . . . . . . . . . . . . . . . . . 40
ii
Prepaid Finance Charge . . . . . . . . . . . . . . . . . . . . . . 40
Principal Advanced . . . . . . . . . . . . . . . . . . . . . . . . 40
Prior Balance Renewed . . . . . . . . . . . . . . . . . . . . . . . 41
Quoted Interest Rate . . . . . . . . . . . . . . . . . . . . . . . 41
Total Finance Charge . . . . . . . . . . . . . . . . . . . . . . . 41
Total of Payments . . . . . . . . . . . . . . . . . . . . . . . . . 42
Quoted Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Unit Periods to First Payment . . . . . . . . . . . . . . . . . . . 42
iii
License Agreement
Bottom Line Software, Inc. License Agreement
This is a legal agreement between you, the end user and Bottom Line Software,
Inc.(BLS). By opening this sealed package or by using this Software, you are
agreeing to be bound by the terms of this license agreement..
Grant of license: Bottom Line Software, Inc. grants you, (the person or
entity who purchased this license) a non exclusive, non transferable license
to use this software on a single terminal, connected to a single CPU. You may
not network the software or otherwise use it on more than one computer at the
same time.
If any provision of this license shall be held to be unenforceable, such
holding shall not affect the enforceability of any other provision. Your
licensed right to use this software terminates upon your violation of any of
the terms of this agreement.
You may terminate this license agreement without notice by destroying the
software and any printed materials provided with it.
Proprietary rights: You agree to take all necessary steps to ensure that
the provisions of this license agreement are not violated by yourself or any
other person under your control or in your service. The software and manual
contain important trade secrets and intellectual property of BLS. All
copyright, patent, trade secret, trademark, and other intellectual proprietary
rights to the licensed software are and shall remain the valuable property of
BLS.
Copyright: This software is owned by BLS and is protected by United States
Copyright laws and international treaty provisions. You must treat the
software as any other copyrighted material with these exceptions. You may make
one copy of this software for on site backup purposes and one more copy for
off site backup. You may copy the software to a hard disk. You may not copy
the manual or other printed materials accompanying the software.
Other restrictions: You may not rent, lease, or sell the Software. You may
not reverse engineer, decompile, or disassemble the Software.
Dual Media Software: If the Software includes both 3 1/2 and 5 1/4 inch disks,
you may use only one or the other as appropriate for your computer. You may
not use the other disks on another computer or rent, loan, lease, or otherwise
transfer them to another user.
Limited Warranty: BLS warrants that the software will perform
substantially in accordance with the accompanying written materials for a
period of 90 days from the date of receipt as determined by the invoice date.
The media is warranted to be free of defects and readable for the same period.
ZCALC Consumer Loan Writer page 1
Implied warranties on the software of media are also limited to the same
period.
Customer Remedies: BLS's entire liability and your exclusive remedy shall
be, at BLS's option either (a) the return of the price paid or (b) the
replacement of the software or media that does not meet the limited warranty
and which is returned to BLS with a copy of your invoice.
No Other Warranties: BLS disclaims any other warranties, either expressed
or implied including but not limited to implied warranties of merchantability
and fitness for a particular purpose.
No liability for consequential damages: In no event shall BLS or its
dealers or suppliers be liable for any damages whatsoever (including, without
limitation, damages for loss of business profits, business interruption, loss
of business information, or other pecuniary loss) arising out of the use of or
inability to use this product, even if BLS has been advised of the possibility
of such damages.
This limited warranty gives you specific legal rights. Since some states do
not allow certain exclusions or limitations of liability, you may have other
rights that vary from state to state.
Both the software and the manual are furnished under the terms of this license
agreement. Both are copyrighted by Bottom Line Software and neither may be
reproduced or copied except in accordance with the terms of the license
agreement. Both the Software and the manual are, and remain the property of
Bottom Line Software.
ZCALC Consumer Loan Writer page 2
What is Zcalc?
ZCALC is a consumer loan calculator. It performs essentially the same function
as the programmable calculators available from many calculator manufacturers.
ZCALC may be programmed to produce the loan documents on your printer.
ZCALC runs as a program on your IBM-PC or compatible computer. It will provide
you a copy for each officer or secretary who has access to a PC. Which is much
more convenient and affordable than buying additional calculators. Multi user
license agreements are available.
ZCALC Consumer Loan Writer page 3
Installation
Disk contents
The disk you receive will contain the following files:
Contents of Zcalc distribution disk
12-01-91
1 BAT \ These files contain DOS commands
2 BAT \ to perform the disk menu options
3 BAT \
4 BAT \
5 BAT \
6 BAT \
6 DOC This file contains information displayed by 6.BAT
B&W BAT This file starts zcalc on for Black & white monitors
MENU BAT This file is a program to print the disk menu
MENU SCR This file contains the disk menu
ZCALC EXE This file contains the program, Zcalc.
The contents of this disk will change from time to time.
Notice the file FILE.LST. This file contains the file list reproduced here. If
the disk contents do not agree with the above list, print the contents of the
file called FILE.LST. It will contain the latest available information.
Automatic Installation
The Zcalc system is provided on two disks. The first disk contains credit
insurance rates and form definition files. The second disk contains the actual
Zcalc program.
Each distribution disk contains an installation program. This installation
program is accessed by typing the command A:menu(enter).
Follow these simple instrutions:
(enter) means press the enter key. On some computers this key is called
(return).
1)Place the distribution disk in drive A:
2)Type the command:
ZCALC Consumer Loan Writer page 4
A:menu<enter>
The "A" and the colon are required. There are no spaces.
You will see this menu:
███████████████████ ZCalc System █████████████████░
█ Installation Menu █░░
█ █░░
█ █░░
█ 1) Install Zcalc System Programs on C: █░░
█ █░░
█ 2) Install Zcalc System Programs on B: █░░
█ Requires 720K 3.5inch, 1.44M 3.5inch █░░
█ or 1.2M 5.25 inch floppy. █░░
█ █░░
█ The program must be installed. It cannot █░░
█ be executed from this disk. █░░
█ █░░
█ Type menu selection, then <Return> █░░
█ █░░
█ █░░
███████████████████████████████████████████████████████████████░░
░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░
The actual installation process is automated and takes only about a minute.
The menu includes options for installation on a hard disk or on a floppy disk.
Floppy Disk Instalation
Zcalc will not fit on a double sided double density 362K 5.25 inch floppy
disk. To use Zcalc on a floppy disk, a computer must have a floppy disk drive
with a capacity of 720K or more.
Manual Installation
ZCALC comes to you on two diskettes. The first thing you must do is to copy
all the files toy your working disk.
NEVER USE THE ORIGINAL DISKETTES FOR ANYTHING BUT MAKING COPIES!
ZCALC requires several files to operate. All the files are expected to be in
the startup directory.
The required files are:
ZCALC.EXE The program file
ZCALC Consumer Loan Writer page 5
ZCPARM.DBF The program parameter file
INSMENU.DBF The credit insurance menu
CL_TX.DBF The credit life rates
AH_TX.DBF The A&H rates
ZCHELP.DBF The help database
ZCHELP.DBT The help screens
ZCALC.PIF The Windows 3.0 Program Information File . (Required
for running ZCALC under windows 3.0)
FORMXX.DBF Various form files.
FORMXX.DBT The form file come in pairs. The name before the period will
be the same. The extentions will be .DBF and .DBT.
These files vary for each installation. They are used by ZCALC to format the
data to fit the lender's preprinted loan forms.
Most of the files on the distribution disk are compressed into a single large
file called ZCALC.ZIP.
If you have a hard disk, copy this file and the file pkunzip.exe to the hard
disk subdirectory which will contain your ZCALC program. Log on to this
subdirectory and type this command:
PKUNZIP ZCALC.ZIP (enter)
You will see a series of messages indicating the files contained in the
ZCALC.ZIP file are being uncompressed or extracted. When the process is
finished you may delete the PKUNZIP.EXE AND THE ZCALC.ZIP files.
If you are reinstalling a file, the unzip program will print a message that
the file already exists and ask if you want to overwrite it. If you answer no,
the old file will remain and the new file will not be installed. If you answer
yes, the old file is replaced with the new file and is irretreivable. If you
are not sure, copy the old file to a floppy disk before installing the new
file.
If You Can't Read the Screen
ZCALC is written to take advantage of a color monitor. All screen output is in
color. Some monochrome monitors are more successful than others at displaying
color screens. Some are so good, you will have no problem at all. Others are
so bad that your screen may appear partially or completely blank.
ZCALC attempts to determine if your machine has a color monitor. If ZCALC can
determine that your machine does not have a color monitor, it will convert all
screen output to black and white.
Unfortunately, the only information available to a program running on an IBM
compatible PC is whether the machine contains a color video adapter card. Many
machines, especially clones, which are designed to run graphics programs on
ZCALC Consumer Loan Writer page 6
monochrome screens, tell the program they contain a color card. However,this
does not mean however that the machine has a color monitor. These machine may
cause problems.
If your machine has the color video adapter and a monochrome monitor, you may
force the program to convert all output to black and white. See the "Edit
Program Options" selection under the "Utilities" menu
ZCALC Consumer Loan Writer page 7
Using Zcalc
To Start the Program
After the program has been installed, it is started by typing its name, ZCALC
followed by the enter key.
Screens
When ZCALC is loaded, you will see this screen:
╔══════════════════════════════════════════════════════════════════════════════╗
║ F1 = Help ZCalc - Consumer Loan Calculator Vers. 2.00.03 ║
║ Main Menu ║
╠══════════════════════════════════════════════════════════════════════════════╣
║ ║
║ ║
║ ║
║ ║
║ ║
║ ║
║ 1) New loans. ║
║ 2) Calculators. ║
║ 3) Print loan forms. ║
║ 4) Utilities. ║
║ 9) Exit Zcalc. ║
║ ║
║ ║
║ ║
║ ║
║ ║
║ ║
╠══════════════════════════════════════════════════════════════════════════════╣
║ Calculate payment, balloon, finance charge, CL&AH premiums. etc. ║
╚══════════════════════════════════════════════════════════════════════════════╝
All ZCALC functions are accessed through this menu.
ZCALC Consumer Loan Writer page 8
Menu Operations
ZCalc is completely menu operated. You never have to remember any commands.
A menu is a list of tasks, or functions the program can perform. Entering a
new loan, is a menu function. Printing a trial balance is a menu function.
Since one menu cannot display all the possible functions the system can
perform, related tasks are listed together on menus.
Using the Menus
Menus consist of a list of options, or items, preceded by an option number.
The option number is listed to the left of the menu item. To keep the screen
clean and readable, menus are limited to no more than eight options plus the
ninth, return option. Option 9 is always return.
The return option takes you back to the point in the program from which you
came to the current menu. This may be to a previous menu or to some other
function.
The return option on the main menu returns you to DOS, or to your automatic
menu system, if you have one installed on your machine.
Selecting Menu Options
There are two ways to select a menu option.
If you know exactly what you want to do and how to do it, simply press the
numeric key corresponding the menu option. To select option 3, press the 3
key. You may select either the 3 key on the typewriter keyboard, or if the
NumLock key is set to numbers, you may use the 3 key on the numeric key pad.
DO NOT use the function key labeled F3.
If you are a new user and not yet confident in your knowledge of the menu
options and the functions they perform, you may use the cursor keys, or to
select a menu option.
Cursor key selection is done by highlighting a menu selection and pressing the
enter key.
Highlighting means that one selection will be displayed in a manner that is
noticeably different from the rest of the options. Highlighting usually
results in the selected option being displayed in reversed colors. Some
computer video displays may handle this in a different manner.
When an option is highlighted, selected, a message will appear at the bottom
of the screen. This message will give additional information about the
selected option.
ZCALC Consumer Loan Writer page 9
To select an option, press either the or the keys. If you press the up
key, the highlight bar will jump to the next higher option on the screen
(Lower number, higher physical position). The down key has the opposite
effect.
The highlight bar will "roll around" from top to bottom or from bottom to top.
If you press Up when the bar is on the top selection, it will "roll around" to
the bottom selection and vice versa.
Pop Up Menus
ZCALC will occasionally ask for additional information such as what type
credit life insurance, if any, you want to place on the loan. These
selections will be made from menus that will appear at the bottom of the
screen. When a menu pops up, it will temporarily obscure the data that was
previously on the screen. Do not worry, it is not lost. When your menu
selection has been made, the screen will be restored to the same condition as
before the menu appeared.
╔══════════════════════════════════════════════════════════════════════════════╗
║ Z'Loan, Consumer Loan Calculator ║
╠══════════════════════════╤════════════╤═════════════════════════╤════════════╣
║ Principal advanced │ 10,000.00 │ Official fees financed │ 12.00 ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Prior balance renewed │ 1,000.00 │ Points (finance charge) │ 12.00 ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Quoted interest rate │ 12.00 │ Credit life │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Disclosed rate (APR) │ │ Accident and health │ ║
╟────────────────────────── ─┼────────────╢
║ Date of note ┌ Select Credit Life Insurance ────┐ │ ║
╟────────────────────────── │ 0 No credit life insurance │ ─┼────────────╢
║ Date first payment │ 1 Single decreasing term │ │ ║
╟────────────────────────── │ 2 Single level term │ ─┼────────────╢
║ Date maturity │ 3 Joint decreasing term │ │ ║
╟────────────────────────── │ 4 Joint level term │ ─┼────────────╢
║ Number of payments └──────────────────────────────────┘ │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Number payments per year │ 12 │ Odd days to first pmt │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Balloon payment no │ 0 │ Odd days interest │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Balloon payment amount │ 0.00 │ Net amount financed │ ║
╚══════════════════════════╧════════════╧═════════════════════════╧════════════╝
In the above example, all the data has been entered up to the point that the
program needs to know what type of credit life insurance is to be computed for
ZCALC Consumer Loan Writer page 10
the loan. The menu "pops up" at the bottom of the page and asks the operator
to select a credit life option.
ZCALC Consumer Loan Writer page 11
ZCALC Menu Functions
Zcalc menus offer the following functions. They are presented here in the form
of an outline.
Menu Hierarchy
Main Menu
1) New Loans Menu
1) New Loan Calculations
2) Recalculate Previous Loan
3) New Texas Split Rate Loan
4) Recalc Texas Split Rate Loan
5) Print Loan Forms
6) Print Audit Statement
9) Exit this Menu
2) Calculators Menu
1) Financial Calculators
2) Date Calculator
3) APR Calculator
4) Precomputed Loan Payoff
9) Exit this Menu
3) Print Loan Forms Menu
1) Print a Loan Document
2) Print a Credit Life Policy
3) Print a Disclosure Statement
4) Print an Audit Statement
9) Exit this Menu
4) Utilities Menu
1) Edit Program Options
2) Print an Insurance Rate Chart
9) Exit Zcalc
ZCALC Consumer Loan Writer page 12
Entering Loan Data on the Screen
The data input screen is like a blank form. Enter the data, and change it,if
necessary, until you have what you want. Use the cursor control keys to move
around on the screen and make corrections.
You can only correct the data you enter; you cannot make changes to the
calculated fields on the screen.
You can change anything you enter before you select the type of credit life
insurance. After that, everything else is calculated and you cannot change
it.
If you do not like the results produced by your selections, select the option
to Recalculate the previous loan. You will be presented the same information
you entered previously and allowed to change any or all items.
Loan Data Input Screen
╔══════════════════════════════════════════════════════════════════════════════╗
║ Z'Loan, Consumer Loan Calculator ║
╠══════════════════════════╤════════════╤═════════════════════════╤════════════╣
║ Principal advanced │ 0.00 │ Official fees financed │ 0.00 ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Prior balance renewed │ 0.00 │ Points (finance charge) │ 0.00 ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Quoted interest rate │ 0.00 │ Credit life │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Disclosed rate (APR) │ │ Accident and health │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Date of note │ / / │ Total amount financed │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Date first payment │ / / │ Total finance charge │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Date maturity │ │ Total of payments │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Number of payments │ 0 │ Payment amount │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Number payments per year │ 0 │ Odd days to first pmt │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Balloon payment no │ 0 │ Odd days interest │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Balloon payment amount │ 0.00 │ Net amount financed │ ║
╚══════════════════════════╧════════════╧═════════════════════════╧════════════╝
ZCALC Consumer Loan Writer page 13
Entering Dates
Zcalc presents you with a blank template to fill in for the dates. It looks
like this:
/ /
Dates are entered month/day/year, like this:
mm/dd/yy
You must enter all six figures. If the month or the day is the sixth, you must
enter 06, not just 6. This is inconvenient but necessary for the validation
routines.
Each date entry is validated before you can leave the date field. If the date
entered is not a valid date, the computer will beep and refuse to continue on
to the next field. When this happens, use the backspace or left or right arrow
keys to move to the invalid part of the date and change it, or reenter the
entire date.
Entering Numbers
When entering numbers, you must enter the decimal point before entering cents.
You do not enter commas for thousands. The comas will be inserted for you.
Entering the Interest Rate
The interest rate may be entered as a percent or as a fraction.
Example:
Twelve and one half percent may be entered as:
.125
or as
12.5
ZCALC Consumer Loan Writer page 14
Loan Calculations
Calculating a New Loan
After entering the initial loan data, but before specifying the credit
insurance options, the screen will look like this:
╔══════════════════════════════════════════════════════════════════════════════╗
║ Z'Loan, Consumer Loan Calculator ║
╠══════════════════════════╤════════════╤═════════════════════════╤════════════╣
║ Principal advanced │ 10,000.00 │ Official fees financed │ 12.00 ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Prior balance renewed │ 1,000.00 │ Points (finance charge) │ 12.00 ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Quoted interest rate │ 12.00 │ Credit life │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Disclosed rate (APR) │ │ Accident and health │ ║
╟────────────────────────── ─┼────────────╢
║ Date of note ┌ Select Credit Life Insurance ────┐ │ ║
╟────────────────────────── │ 0 No credit life insurance │ ─┼────────────╢
║ Date first payment │ 1 Single decreasing term │ │ ║
╟────────────────────────── │ 2 Single level term │ ─┼────────────╢
║ Date maturity │ 3 Joint decreasing term │ │ ║
╟────────────────────────── │ 4 Joint level term │ ─┼────────────╢
║ Number of payments └──────────────────────────────────┘ │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Number payments per year │ 12 │ Odd days to first pmt │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Balloon payment no │ 0 │ Odd days interest │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Balloon payment amount │ 0.00 │ Net amount financed │ ║
╚══════════════════════════╧════════════╧═════════════════════════╧════════════╝
This menu allows the operator to select the credit life coverage desired.
Selection can be made by pressing the number key corresponding to the option
desired, or by highlighting the desired option with the cursor control keys.
After a selection is made, the enter key must be pressed to activate the
selection and to continue on to the next menu.
Note that not all selections are always available. In Texas for example,
Accident and Health insurance is only available on loans that are payable in
equal monthly installments. If you select A&H on a balloon note, the program
will compute a premium of $0.00.
ZCALC Consumer Loan Writer page 15
The next menu is the Accident and Health Insurance Menu. It is similar to the
credit life insurance menu.
This menu allows the operator to select the credit life coverage desired.
Selection can be made by pressing the number key corresponding to the option
desired, or by highlighting the desired option with the cursor control keys.
After a selection is made, the enter key must be pressed to activate the
selection and to continue on to the next menu.
Note that not all selections are always available. In Texas for example,
Accident and Health insurance is only available on loans that are payable in
"equal monthly installments...". Thus if you select A&H on a balloon note, the
program will compute a premium of $0.00.
When all data and all options have been specified, the program computes the
final results and displays them on the screen with the report menu.
The final output screen looks like this:
╔══════════════════════════════════════════════════════════════════════════════╗
║ Z'Loan, Consumer Loan Calculator ║
╠══════════════════════════╤════════════╤═════════════════════════╤════════════╣
║ Principal advanced │ 12,000.00 │ Official fees financed │ 12.00 ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Prior balance renewed │ 2,000.00 │ Points (finance charge) │ 120.00 ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Quoted interest rate │ 0.10 │ Credit life │ 519.24 ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Disclosed rate (APR) │ 10.4206 │ Accident and health │ 0.00 ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Date of note │ 01/01/91 │ Total amount financed │ 14,531.24 ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Date first payment │ 02/01/91 │ Total finance charge │ 3,394.38 ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Date maturity │ 01/01/94 │ Total of payments │ 17,805.62 ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Number of payments │ 60 │ Payment amount │ 308.75 ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Number payments per year │ 12 │ Odd days to first pmt │ 0 ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Balloon payment no │ 36 │ Odd days interest │ 0.00 ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Balloon payment amount │ 6,999.37 │ Net amount financed │ 14,411.24 ║
╚══════════════════════════╧════════════╧═════════════════════════╧════════════╝
Immediately prior to displaying this screen, you will see a message box that
says:
Modify data and recalculate, or press Esc to return to menu.
ZCALC Consumer Loan Writer page 16
The message will stay on the screen aproximately three seconds and will then
dissappear so the operator can read the screen.
The operator can now re-enter all data or change only one item by highlighting
it with the cursor control keys and re-entering only that item. The cursor can
be moved forward or backward on the screen until the Credit Life Insurance
option menu is displayed. After that, it is not possible to back up.
Pressing the escape key will return the program to the calculator menu for
further calculations or for printing loan documents.
To print reports, press the Esc key to return to the menu. The menu will offer
selections for printing reports.
Recalculating the Prior Loan
When the calculator finishes calculating a loan, it enters the recalculation
mode. In this mode, the display screen shows the results of the prior
calculation. The cursor may be moved to any field, prior to the credit life
menu, to change the terms of the loan. and recalculate new results.
When the calculator is in the recalculation mode, pressing the Esc key will
return to the previous menu.
Recalculation mode may also be chosen from the Loan Calculations Menu.
Single Payment Loans
To calculate a single payment loan, enter 1 when asked for the number of
payments. Enter 0 in the balloon payment field. When asked to select credit
life insurance be sure to specify level term rather than decreasing term.
ZCALC Consumer Loan Writer page 17
Texas Split Rate Loans
To calculate a Texas split rate loan, select the Texas Split Rate option from
the menu or press the enter key with zero in the rate field. This action will
present the zero rate menu from which you may select the Texas split rate
loan.
╔══════════════════════════════════════════════════════════════════════════════╗
║ Z'Loan, Consumer Loan Calculator ║
╠══════════════════════════╤════════════╤═════════════════════════╤════════════╣
║ Principal advanced │ 0.00 │ Official fees financed │ 0.00 ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Prior balance renewed │ 0.00 │ Points (finance charge) │ 0.00 ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Quoted interest rate │ 0.00 │ Credit life │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Disclosed rate (APR) │ │ Accident and health │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Date of note │ / / │ Total amount financed │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Date fir╔═╡ Zero Rate Detected! ╞═══════════════╗ance charge │ ║
╟─────────║ ║───────────────┼────────────╢
║ Date mat║ Use Texas split rates. ║payments │ ║
╟─────────║ Use a Zero rate. ║───────────────┼────────────╢
║ Number o║ Reenter the rate. ║mount │ ║
╟─────────║ ║───────────────┼────────────╢
║ Number p╚═══════════════════════════════════════╝to first pmt │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Balloon payment no │ 0 │ Odd days interest │ ║
╟──────────────────────────┼────────────┼─────────────────────────┼────────────╢
║ Balloon payment amount │ 0.00 │ Net amount financed │ ║
╚══════════════════════════╧════════════╧═════════════════════════╧════════════╝
The printed report will specify the expiration date of the split rates. These
rates change every year on July first.
DO NOT USE SPLIT RATES AFTER THE EXPIRATION DATE LISTED ON THE PRINTED REPORT.
Contact Bottom Line Software for an update if the rates have expired.
Precomputed Loan Payoff (Rule of 78ths)
ZCALC Consumer Loan Writer page 18
The precomputed loan payoff screen computes a payoff for any loan computed by
the rule of 78ths. The payoff input screen looks like this:
╔══════════════════════════════════════════════════════════════════════════════╗
║ ║
║ ║
║ ║
║ Borrower name or loan number : ░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░ ║
║ ║
║ Original Rebate ║
║ Amount Amount ║
║ ║
║ Current loan balance (Gross) : 0.00 ║
║ Total original finance charge : 0.00 ║
║ Credit life insurance premium : 0.00 ║
║ A and H insurance premium : 0.00 ║
║ Single interest insurance premium : 0.00 ║
║ Dealer reserve amount : 0.00 ║
║ Total months in original contract : 0 ║
║ Months elapsed before rebate : 0 ║
║ Rebate factor : ║
║ Current loan payoff (net of rebates) : ║
║ ║
║ ║
║ ║
║ ║
║ ║
╚══════════════════════════════════════════════════════════════════════════════╝
Enter the loan data in the left column. The computer calculates the results
and displays them in the right column. An example of a loan payoff calculation
follows:
╔══════════════════════════════════════════════════════════════════════════════╗
║ ║
║ ║
║ ║
║ Borrower name or loan number : Jackson, William J.░░░░░░░░░░░ ║
║ ║
║ Original Rebate ║
║ Amount Amount ║
║ ║
║ Current loan balance (Gross) : 12,345.67 ║
║ Total original finance charge : 2,400.00 331.80 ║
║ Credit life insurance premium : 333.00 46.04 ║
║ A and H insurance premium : 444.00 61.38 ║
║ Single interest insurance premium : 0.00 0.00 ║
║ Dealer reserve amount : 240.00 33.18 ║
║ Total months in original contract : 60 ║
║ Months elapsed before rebate : 38 ║
║ Rebate factor : 0.138251 ║
ZCALC Consumer Loan Writer page 19
║ Current loan payoff (net of rebates) : 11,873.27 ║
║ ║
║ ║
║ ║
║ ║
║ ║
╚══════════════════════════════════════════════════════════════════════════════╝
The borrowers name or loan number is optional. It is not used by the
calculator but it is useful to identify the printed report.
When making the entries for the loan payoff, the rebate amounts are charged
back to the appropriate accounts. The account names and numbers are available
from the department supervisor. These entries will all be debits.
The entries will be:
Debit Credit
Customer check 11,873.27
Loan Account 12,345.67
Unearned finance 331.80
charge
Credit life premium 46.04
A&H premium 61.38
Dealer reserve 33.18
account
Totals: 12,345.67 12,345.67
Note that there was no single interest insurance in the example, If there is
single interest insurance, that entry will also be a debit.
In most cases, the credit life and A&H insurance rebates will be made to the
same account.
ZCALC Consumer Loan Writer page 20
APR Calculations
Calculating the Regulation Z Annual Percentage Rate is accomplished easily
with the APR calculator, even if the mortgage has points deducted from the
face amount.
The APR calculator looks like this:
┌──────────────────────────────────────────────────────────┐
│ What is the gross amount financed? 1,000.00 │
│ What is the origination fee? 10.00 │
│ How many payment streams? 1 │
│ What is the length of one unit period? 30 │
│ What is the basis, 360/365. REG Z uses - 360 │
└──────────────────────────────────────────────────────────┘
│ Enter data about Payment │
│ payment streams Stream │
│ 1 │
├─────────────────────────────────────────┤
│ Payment amount 89.00 │
│ Number of payments 12 │
│ Periods to first pmt 1 │
│ Odd days to first pmt 0 │
│ │
│ Gross amount financed 1,000.00 │
│ Net amount financed 990.00 │
│ Annual Percentage Rate 14.2377 │
└─────────────────────────────────────────┘
APR Calculator Data Entry
Gross Amount Financed
The gross amount financed is the total principal amount of the loan. If the
loan is a consumer loan, this amount will include credit insurance and
official filing fees if they are charged.
This is the amount of the loan before the "points" are deducted.
Origination Fee
The origination fee is the "points". This amount does not include application
fees, credit report fees, or other fees that are paid to third parties. It
includes only the discount points.
ZCALC Consumer Loan Writer page 21
Payment Streams
Payment streams can be complicated but for a normal mortgage loan it is not. A
normal mortgage or consumer loan has one payment stream.
A payment stream is one or more payments of the same amount paid once, or paid
repeatedly at regular periodic intervals. Twenty four monthly payments of
$125.00 each is one payment stream. One payment of $1200.00 payable two years
from now is one payment stream. A balloon note has two payment streams. A
normal mortgage with a secondary schedule would have two payment streams. A
normal mortgage with a secondary schedule and a balloon payment would have
three payment streams.
The APR calculator allows a maximum of three payment streams.
Unit Period
Regulation Z calculations are made using the common 30 day month, 360 day year
method of computing interest. All years are 360 days. All months are 30 days.
One unit period is the normal time period between the regular payments of this
payment stream. The unit period for monthly payments is 30. The unit period
for quarterly payments is 90. The unit period for weekly payments is 7. Etc
Basis, 360/365
Regulation Z uses the 360 day basis.
┌─────────────────────────────────────────┐
│ Enter data about Payment │
│ payment streams Stream │
│ 1 │
├─────────────────────────────────────────┤
│ Payment amount 89.00 │
│ Number of payments 12 │
│ Periods to first pmt 1 │
│ Odd days to first pmt 0 │
│ │
│ Gross amount financed 1,000.00 │
│ Net amount financed 990.00 │
│ Annual Percentage Rate 14.2377 │
└─────────────────────────────────────────┘
ZCALC Consumer Loan Writer page 22
For each payment stream, you will be asked the following data:
Payment Amount
Enter the amount of the payments in this stream. All payments in a payment stream are the same amount.
Number of Payments
How many payments are in this payment stream? If the loan has a balloon at the 24th month, the number of
payments in the first payment stream is 23, not 24.
The balloon payment would be the only payment in payment stream two.
You must know the dollar amount of the balloon payment. If you have not already done so, use the Schedule
Create function to create a schedule and calculate the amount of the balloon payment for you.
Periods to First Payment
How many complete payment periods will elapse before the first payment is due? This is tricky because Reg Z
assumes all months are 30 days. However,it does not apply the 30 day month rule here.
If the payments are monthly and the loan is dated February first, the first payment is due on March first.
This is obviously not 30 days but it is the correct date. In this case, the number of unit periods is one. If
the first payment is due anytime in April, the number of unit periods is two. If the payment is due in
February, the number of unit periods is zero.
Odd Days to First Payment
This is the most difficult part of Reg Z calculations because Reg Z runs in reverse. If the number of unit
periods is one, the number of odd days is the number of days from the date one unit period before the date of
the first payment to the date of the note.
Date of note 02-03-91
Date of first payment 03-05-91
Number of unit periods 1
Odd period begins 02-03-90
Odd period ends 02-05-90
Odd days 2
Multiple Payment Streams
If there are two or three payment streams, the calculator screen will display two or three columns
accordingly. Enter the data for each payment stream. The calculator does not support more than three payment
streams.
ZCALC Consumer Loan Writer page 23
Financial Calculators
The financial calculations menu provides several commonly used calculations for time value of money problems:
1) Amount of Loan
2) Amount of Payment
3) Number of Payments
4) Future Value
5) Present Value
Amount of Loan
To calculate the amount of loan a specific series of payments can repay, select Amount of loan by pressing
the "A" key.
This calculator screen will appear:
╒═══════ Calculate loan amount ═════════╕
│ │
│ Payment amount..... 0.00 │
│ Interest rate...... 0.0000 │
│ Number of payments. 0 │
│ Payments per year.. 12 │
│ Payment type....... 0 │
│ │
╞═══════════════════════════════════════╡
│ Amount of loan..... │
╞═══════════════════════════════════════╡
╘══════ Constant principal at end ══════╛
Enter the data requested. This calculator expects the same data and works in the same manner as any business
calculator except that you do not tell it to calculate. When you make the last entry, payment type, the
amount of loan will be calculated and displayed.
The payment type specified is described on the bottom line of the calculator box. If you change the payment
type, the description will change.
Immediately after displaying the amount of the loan, the calculator will return to the data entry mode, ready
to accept another problem. When you are finished, press ESC to return to the main menu.
Amount of Payment
This calculator calculates the amount of payment requred to amortize a loan.
╒══════ Calculate payment amount ═══════╕
ZCALC Consumer Loan Writer page 24
│ │
│ │
│ Amount of loan..... 1,000.00 │
│ Interest rate...... 12.0000 │
│ Number of Payments. 12 │
│ Payments per year.. 12 │
│ Payment type....... 0 │
╞════ │
│ Pa ┌─ Valid payment types are: ────────────────────────┐
╞════ │ 1 Level payment amount, take interest first. │
╘════ │ 2 Level principal amount + all accrued interest. │
│ 3 Level payment amount at beginning of period. │
│ 4 Canadian, monthly payment, semiannual compound. │
└────────────────────────────────────────────────────┘
The Screen Shows the payment calculator screen with a partially completed
problem and with the payment type selection menu opened. Pressing the enter
key with a 0 in the payment type field will open this menu.
Note types three and four. Three is used for leases. Four is used only in
Canada.
Number of Payments
This calculator computes the number of payments required to pay off a loan,
given the other terms of the loan.
╒════ Calculate Number of Payments ═════╕
│ │
│ Amount of loan..... 1,000.00 │
│ Interest rate...... 12.0000 │
│ Payment amount..... 88.50 │
│ Payments per year.. 12 │
│ Payment type....... 1 │
│ │
╞═══════════════════════════════════════╡
│ Number payments.... 12.05 │
╞═══════════════════════════════════════╡
╘═════════ Level payment at end ════════╛
Valid payment types are:
1 Level Payment at end of period.
2 Constant principal payment at end of period.
3 Level payment amount at beginning of period.
ZCALC Consumer Loan Writer page 25
Option three us ususally used only for leases.
ZCALC Consumer Loan Writer page 26
Date Calculators
The date calculator allows the calculation of days between dates or the
calculation of past or future dates.
The date calculator has two options:
1) Days Between Dates
2) Future or Past Date
Days Between Dates
The days between dates screen looks like this:
╒════ Calculate days between dates ═════╕
│ │
│ Enter first date... 03/18/90 │
│ Enter second date.. / / │
│ │
╞═══════════════════════════════════════╡
│ Days between dates. │
╞═══════════════════════════════════════╡
╘═══════════════════════════════════════╛
The calculator assumes the first date is the system date, often, this will not be the case. You may change
the first date to any valid date.
Next enter the second date, the calculator will instantly calculate the days between these dates and display
the result. The calculator will return to the data entry mode and await more dates. You may enter and
calculate days between dates as long as you like. When you are ready to quit, press the ESC key to return to
the menu.
Past or Future Dates
The past or future date calculator looks like this:
╒═══ Calculate future or past date ═════╕
│ │
│ Enter beginning date...... 01/05/92 │
│ Enter days future or past 180 │
│ │
╞═══════════════════════════════════════╡
│ Future date is. 07/03/92 │
╞═══════════════════════════════════════╡
╘═══════════════════════════════════════╛
ZCALC Consumer Loan Writer page 27
Report Options
Print Disclosure Report
The loan disclosure report prints a Reg Z loan disclosure statement. This
statement has been approved by Federal Compliance Regulators in several
states. However, regulators are individuals and do not always agree.
BEFORE USING THIS STATEMENT TO COMPLY WITH REG Z DISCLOSURE REQUIREMENTS, YOU
SHOULD SATISFY YOURSELF AS TO ITS COMPLIANCE WITH REG Z.
The loan disclosure statement looks like this:
LOAN DISCLOSURE STATEMENT
Bottom Line Financial, Inc. Borrower name
P.O. Box 1804 Address line 1
Burleson, Tx 76028-1804 Address Line 2
817-447-8437
----------------------------------------------------------------------------
ANNUAL PERCENTAGE FINANCE AMOUNT TOTAL OF
RATE CHARGE FINANCED PAYMENTS
----------------------------------------------------------------------------
The cost of The dollar The amount of The total of
the credit amount the credit provided all scheduled
as an annual credit will to me or on my payment
percentage rate. cost. behalf. amounts.
----------------------------------------------------------------------------
12.6077 2,342.40 11,181.28 13,423.68
----------------------------------------------------------------------------
1 Amount advanced..........................: 10,000.00
2 Previous balance renewed.................: 1,000.00
3 Official fees financed...................: 12.00
4 Origination fee (prepaid finance charge).: 100.00
5 Credit life insurance....................: 169.28
6 Accident and Health insurance............: 0.00
7 TOTAL AMOUNT FINANCED....................: 11,081.28
8 TOTAL FINANCE CHARGE.....................: 2,342.40
9 TOTAL OF PAYMENTS........................: 13,423.68
10 Number of regular payments..............: 60.00
11 Amount of regular payment...............: 374.01
12 Amount of final payment.................: 0.00
ZCALC Consumer Loan Writer page 28
13 Date of note............................: 01/01/91
14 Date of first payment...................: 02/15/91
15 Date of last payment....................: 01/15/94
16 BALLOON at payment no...................: 36
17 Balloon principal payment...............: 331.22
18 Balloon interest payment................: 3.31
19 Balloon total payment amount............: 334.53
Total amount financed, 7 = 1 + 2 + 3 + 5 + 6 - 4
ZCALC Consumer Loan Writer page 29
Print Audit Report
Upon selecting this options, Zcalc will print a printed report giving all the
details about the loan you have calculated. It allows you to add up to four
lines of comments concerning the loan. These comments are typed on the screen
and may be "amended" if necessary on the screen before printing the report.
The Zcalc detail report looks like this:
- Loan calculation audit report -
Amount of credit advanced : 10,000.00
Previous balance renewed : 1,000.00
Loan number renewed : 0.00
Official fees paid : 12.00
Origination fee charged -
(Prepaid finance charge) : 100.00
Credit life insurance : 169.28
Balloon credit life level : 7.71
Balloon credit life decr : 161.57
Accident and health ins : 0.00
Gross amount financed : 11,181.28
Net amount financed -
(Net amount used for APR) : 11,081.28
Total finance charge : 2,342.40
Income collected, not earned : 2,242.40
Total of payments : 13,423.68
Amount of regular payment : 374.01
Payment to amortize amount financed : 374.01
Payment to amortize odd days interest : 1.73
Payment to amortize prepaid finance charge : 2.78
Number of regular payments : 60.00
Number of balloon payments : 1.00
Balloon at payment number : 36.00
Balloon interest amount : 3.31
Balloon principal amount : 331.22
Balloon total amount : 334.53
Quoted accrual rate : 12.0000
Disclosure rate (APR) : 12.6077
Date of note : 01/01/91
Date of first payment : 02/15/91
Date of maturity : 01/15/94
Odd days to first payment : 14
Odd days interest charged : 52.18
Payments per year : 12
Credit life State : TEXAS
Credit Life rate (level) : 0.007680
Credit Life rate (Decreasing) : 0.004000
Credit life option : 2
Credit life descr : 2 Single level
A & H State :
A & H Rate : 0
A & H option :
ZCALC Consumer Loan Writer page 30
Reading the Audit Report
Some items on this report are self explanatory, others are not. See Definition
of Terms on page 33 for explanations.
ZCALC Consumer Loan Writer page 31
Checking ZCALC with the OCC's APR program.
Bottom Line Software uses several methods to check the accuracy of ZCALC. You
can use a business calculator for some simple cases. Most cases are too
complex for the business calculators. These calculators assume that the first
payment is exactly one month after the date of the note and that there is no
balloon.
For more complicated cases like balloon payments and odd first periods, you
will need the APR program used by the Office of the Comptroller of the
Currency.
When using this, or any other program to check APRs, be sure to print out the
detailed report produced by ZCALC. On this report, locate the figure
identified as the "Net amount financed". When the check program asks for the
"Total amount financed", be sure to use the amount ZCALC identifies as the
"Net Amount financed".
The net amount financed is simply the Total amount financed less any prepaid
finance charges. (Points, or origination fees.) If you feel uncomfortable
about this statement, you can check it by looking at a Regulation Z disclosure
statement. It will state that the Total amount financed is the total of all
principal plus all fees minus any prepaid finance charge.
ZCALC Consumer Loan Writer page 32
Definition of Terms
Accrual Rate
See quoted interest rate.
A&H Premium
This is the Accident and Health (disability) insurance premium computed for
the note. This premium amount takes into account the state rates, the type of
coverage, the amount of coverage and the term of the note.
Accident and health insurance is not always available on balloon notes.
Amount of Final Payment
This is the same as the amount of regular payment. It is not the same as the
Balloon payment. This payment amount anticipates the need in some cases for
the final payment to be for the amount remaining unpaid. This amount may be a
few cents to a few dollars different from the regular payment. This version of
Zcalc does not use this payment amount. It deliberately adjusts the payment
amounts so that there are no rounding errors and so that the final payment
will be exactly the same as the regular payment.
Balloon Payment Amount
This is the total amount of the balloon payment due on the balloon date. If no
amount is entered here. the program will calculate the loan payment to fully
amortize the loan in the number of payments specified in the Number of
Payments field.
If an amount is entered here, the program will force the balloon payment to
the amount entered. The regularly scheduled payment amount will be calculated
to produce a balloon payment of the specified balloon payment amount on the
balloon maturity date.
Balloon Payment Number
This is the number of the payment at which the loan balloons.
The loan is due in 23 payments computed on a 60 month amortization and one
final payment for all interest and principal remaining unpaid. The balloon
payment is due the month after the 23rd payment, the 24th month. The balloon
payment is payment number 24. Disregard odd days.
ZCALC Consumer Loan Writer page 33
Balloon Interest Payment
Each payment consists of an interest component and a principal component. As
the payment schedule progresses, the interest component becomes smaller and
the principal component becomes larger. At the balloon payment date however,
the principal component takes a big jump because the principal for all those
remaining months suddenly becomes due today. The interest component remains
just slightly smaller than for the previous payment.
This number is reported for information only. It is not needed in processing
the loan.
Balloon Principal Payment
Each payment consists of an interest component and a principal component. As
the payment schedule progresses, the interest component becomes smaller and
the principal component becomes larger. At the balloon payment date however,
the principal component takes a big jump because the principal for all those
remaining months suddenly becomes due today.
This number is reported for information only. It is not needed in processing
the loan.
Balloon Total Payment
The total balloon payment due. Simply the balloon interest component plus the
balloon principal component.
Credit Life and A/H Premium
These insurance premiums are calculated according to built in formulas for
each state or insurance company. You cannot change them. Lending institutions
or others needing premiums calculated should contact Bottom Line Software.
Credit Life Insurance Premium
This is the credit life premium computed for the loan. This premium amount
takes into account the state rates, the type of coverage, the amount of
coverage and the term of the note.
See also the items for Balloon credit life premium on the level part of the
balloon note and the balloon credit life premium on the decreasing part of the
balloon note.
The operator is responsible to tell the program if level or decreasing term
insurance is desired.
ZCALC Consumer Loan Writer page 34
Credit Life, Balloon Level Part
Credit Life, Balloon Decreasing Part
When computing credit life insurance for a balloon loan, there are actually
two different payment streams that must be protected. The first is the stream
of regular monthly payments. This is protected by a decreasing term policy
for the decreasing amount of the loan.
The balloon part of the loan does not decrease. It stays the same right up to
the maturity date. This part of the loan is covered by a level term policy for
the amount and term indicated by the note.
Date of Note
This is the date of the loan contract.
ZCalc assumes the funds are disbursed on this date. Interest will be charged
beginning on this date and odd days interest calculations will begin on this
date.
Date of First Payment
This is the date on which the first monthly payment will come due. All
subsequent payments will be due on the same day of each succeeding month. This
date is also used in the odd days interest calculations.
This date can be any time after the date of the note.
Zcalc does not determine your lending policies. The date of the first payment
can be one day or one hundred days after the date of the note. Zcalc doesn't
care.
However, your insurance company will care. If the first payment is more than
45 to 60 days after the date of the note, your credit life and A&H insurance
may not completely cover claims.
Date of Maturity
The maturity date is the date on which the final payment is due. It is
calculated and displayed in this field. You may not enter it or change it.
Days to First Payment
The number of days to the date of the first payment is calculated and
displayed for your information. It is not displayed on the screen but is
printed on the printed report. Make it a habit to check it. You will catch
errors in date entries by doing so. For example, if you enter the same date
twice, the days to first payment will be 0 when you were expecting it to be 30
or 31.
ZCALC Consumer Loan Writer page 35
Also see Odd Days to First payment.
Disclosure Rate (APR)
The actual rate is the true yield. This is the actual rate earned by the
lender after accounting for rounding off of payment amounts, credit insurance
premiums, official fees, and any other fees. If an origination fee is charged,
it is included in this rate as part of the interest earnings.
The calculations accrue the origination fee over the life of the loan. The
lender may wish to take the origination fee into income immediately, and may
do so without distorting the Regulation Z compliance of the program.
Regulation Z requires a disclosure to the consumer of the rate the borrower is
actually paying. From the point of view of the borrower, it makes absolutely
no difference when the lender considers part of a payment to be income, or
indeed how much the lender applies to income or principal.
The only thing the borrower cares about is how many payments, how much time,
and what payment amount.
Date of Last Payment
This is the maturity date. The final payment is due on this date. If there is
a balloon payment, it is due on this date. Otherwise the final regular payment
is due.
Days to First Payment
The number of calendar days from the date of the note to the date the first
payment is due. This date is used in computing the number of odd days if there
are any.
Days to Last Payment
This is the number of days from the date of the note to the maturity date.
This number is used in calculating the balloon payment.
Some computer systems also request this number as a double check on lending
policy compliance and data entry accuracy.
ZCALC Consumer Loan Writer page 36
Fractional Period, per Reg Z
This is the time period for which odd days interest is charged. This is not a
number of days. If the normal payment period is one month, reg Z assumes every
month is 30 days. If the number of odd days is 18, the fractional period is
then 18/30 or 0.30000 periods.
Gross Amount Financed
This is the total of all items which are considered part of the principal of
the loan. It includes the amount advanced, prior balances, credit insurance
premiums, official fees, etc.
Do not use this amount when computing the APR.
Income Collected Not Earned
Precomputed loans (rule of 78ths) include the total finance charge payable
over the life of the loan in the contract amount. Although this interest is
neither earned nor collected when the loan is originated, this term is usually
used to describe it.
Loan Number Renewed
This number may contain alphabetic or numeric characters. It is used for
identification purposes only,
Net Amount Financed
This is the amount financed, net of any prepaid finance charges. This amount
was actually paid to the borrower in cash or in credit, or to third parties
for the borrowers expenses.
Use this amount when computing the APR.
Number of Payments
The number of regularly scheduled periodic payments. This number will be used
to calculate the payment amount. This number may be greater than the balloon
payment number.
A loan may be specified as having 60 regularly scheduled payments with a
balloon payment at payment 36. This means the payment will be calculated as if
the loan were to be paid in 60 payments but when the 36th payment matures, the
calculator will balloon the entire amount remaining unpaid.
ZCALC Consumer Loan Writer page 37
Number of Payments Per Year
The number of regularly scheduled payments each year. A monthly payment loan
will have 12 payments per year. If the operator presses the enter key with
zero in this field, the program will display a menu of valid choices.
Odd Days to First Payment
If the first payment is not exactly one month after the date of the note,
there are odd days. Odd days can be either positive in the case of long first
period, or negative if the first period is short, less than one month.
If the date of the note is March first and the date of the first payment is
April second, there is one odd day. (positive)
Odd Days Interest
Interest is computed for odd days in accordance with the requirements of Reg
Z. Reg Z specifies that odd days interest be calculated as a partial period
rather than a certain number of days.
If the date of the note is 02-01-88 and the first payment is due 03-10-88, the
odd days interest is calculated as the fraction of a month from 02-01-88 to
02-10-88. The regulation states it is the fractional period from the date of
the note until the date one month before the first payment. In this example
there are 9 odd days from 02-01-88 to 02-10-88. The odd days interest is
calculated as follows:
odd_days_interest = rate X principal / 12 X fractional_period
the fractional_period is the odd days divided by the nominal number of days in
a period. For monthly payments this is defined as 30. Thus:
Fractional_period = 9 / 30 = 0.3000
If the principal is 1000.00 and the rate is 10%, it figures out like this:
odd_days_interest = .10 X 1000 / 12 * .3000 = 2.50
Using a strict 365/365 calculation, this would be:
.10 X 1000 X 9 / 365 = 2.47
ZCALC Consumer Loan Writer page 38
In this case Reg Z gives a little more, in other cases, it will give a little
less.
Official Fees Financed
Official fees charged and included in the amount financed. UCC filing fees,
automobile title registration fees, etc. This field is for fees that the
lender actually paid, in cash, for the borrower. These fees are added to the
amount financed and are not included in the finance charge when computing the
APR for the disclosure statement.
Origination Fee - Points
This is the amount of origination fee. you entered on the data entry screen.
This amount is included in the finance charge and adds to the APR.
This type fee is the fee Reg. Z calls "Prepaid finance charges."
The calculations collect this fee over the life of the loan. It is NOT added
to the amount financed. If you attempt to use a business calculator to check
the payment computed by Zcalc, you will have to allow for this fee.
Zcalc assumes the origination fee will be taken into income immediately. The
remainder of the finance charge will be accrued over the life of the loan.
This figure is the amount to be accrued over the life of the loan.
If you accrue the origination fee over the life of the loan, it also should be
credited to an unearned income account. Ask your supervisor or the person
responsible for your general ledger accounting.
Payment Amount, Regular
This is the amount of the normal monthly payment. The amount of the regular
payment is the amount of payment necessary to repay the loan in the specified
number of monthly payments.
Note that the payment amount is calculated so that the payment amount
multiplied by the number of payments is exactly equal to the total of
payments. There will never be a final payment of an odd amount. Nor will there
be rounding differences. Every dollar amount is adjusted to real world exact
cents. The necessary odd fraction is then transferred to the calculated Annual
Percentage Rate, the APR to be disclosed.
Also see balloon payment.
Payment to Amortize the Amount Financed
ZCALC Consumer Loan Writer page 39
This is the payment amount reqired to repay the Total Amount Financed over the
life of the loan. It does not include odd days interest or origination fees.
Payment to Amortize Odd Days Interest
When odd days interest is charged it is amortized over the life of the loan.
It is not added to the amount financed. The payment is ccalculated as the
payment necessary to amortize the odd days interest amount over the life of
the loan. The life of the loan is the shorter period of the number of payments
or the balloon payment number.
Payment to Amortize Prepaid Finance Charge
When an origination fee is charged, it is amortized over the life of the loan
on a prorata basis. The life of the loan is the shorter period of the number
of payments or the balloon payment number.
Payment Amount, Total
See Payment Amount, Regular
Payments Per Year
How many regularly scheduled payments will be made in one calendar year? The
current version of Zcalc only handles monthly payments so this number is
preset at 12.
Points
See origination fee.
Prepaid Finance Charge
See origination fee.
Principal Advanced
This is the amount of new credit advanced to the borrower. It includes only
the amount advanced directly to the borrower or to a merchant on behalf of the
borrower. It does not include fees such as title or recording fees.
ZCALC Consumer Loan Writer page 40
In the case of a renewal or refinance, this amount may be zero.
Enter dollars and cents. Do not enter commas.
Prior Balance Renewed
This is the total amount of all balances renewed or refinanced. If more than
one loan is being rewritten, the net pay off balances of all these loans must
be computed and totaled, their total is entered here. If this is a new loan,
the previous balance will be zero. Enter dollars and cents. Do not enter
commas.
Note
Either the amount advanced or the previous balance may be zero. They may not
BOTH be zero.
Quoted Interest Rate
This is the quoted rate, simple interest. Zcalc does not work with work "ADD
ON" rates.
This rate is used to calculate the payment amount. If the loan is a simple
interest loan, this is the accrual rate. It is NOT the APR.
Enter the rate you like. You may enter twelve and one half percent as 12.5 or
as .125. Zcalc will understand what you are thinking and will adjust the rate
accordingly. In other words, if you enter a number greater than 1.00 for the
rate, ZCALC will divide it by 100 before using it. Unfortunately, this means
you cannot use a rate of 100% or greater.
Special state rates:
The state of Texas allows a special small loan rate called a split rate. It is
called the eight-eighteen rate due to the way it is computed. Eighteen dollars
per one hundred dollars financed up to $970.00 and eight dollars per one
hundred dollars financed in excess of $970.00 but not exceeding $8500. To
access this rate structure, enter 818 for the interest rate (no decimal).
Total Finance Charge
This is the total interest charge for the entire life of the loan. It does
include the origination fee if one is charged. It does not allow for late
charges or interest on late payments. It assumes all payments are made on
time.
ZCALC Consumer Loan Writer page 41
Total of Payments
This is the total of all the payments required to repay the loan. If there is
a balloon payment, it is included. If there is no balloon payment, this is
simply the payment amount times the number of payments.
Quoted Rate
The quoted rate is the nominal rate of interest. It is the beginning rate, the
rate from which we will make our adjustments.
The quoted rate does not include the effects of rounding calculations, nor
does it include the origination fee. If an origination fee is charged, it is
added to the amount financed and will increase the true yield, the disclosed
APR.
Unit Periods to First Payment
A unit period is the length of time between regular payments. If the loan is
payable monthly, a unit period is one month.
If the date of the first payment is one month or more but, less than two
months after the date of the loan, the number of unit periods is one. If the
date of the first payment is less than one month from the date of the loan,
the number of unit periods is zero.
ZCALC Consumer Loan Writer page 42
