What is advance payment in SAP FS-CML - Loans Management?

SAP Term: advance payment

• Component: FS-CML

• Component Name: Loans Management

• Description: A payment that is made in advance for a loan receivable. An advance payment leads to the generation of advance payment flows and postings. The assigned planned flows are automatically indicated as such, to guarantee clearing in the later debit position.

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• Key Concepts: 
  Advance payment is a feature of the FS-CML Loans Management component of SAP. It allows customers to make payments in advance of the due date, which can be used to reduce the amount of interest they owe. This feature is especially useful for customers who are unable to pay their loan in full on the due date. 
  
  How to use it: 
  To use the advance payment feature, customers must first log into their SAP account and navigate to the FS-CML Loans Management component. Once there, they can select the “Advance Payment” option and enter the amount they wish to pay in advance. The system will then calculate the amount of interest that will be saved by making this payment. 
  
  Tips & Tricks: 
  It is important to note that advance payments are not always beneficial for customers. Depending on the terms of their loan, they may end up paying more interest overall if they make an advance payment. Therefore, it is important to carefully consider whether or not an advance payment is right for them before making one. 
  
  Related Information: 
  For more information about the FS-CML Loans Management component of SAP, please visit https://help.sap.com/viewer/product/FS-CML_LOANS_MANAGEMENT/latest/en-US.