Debt Modification

This page covers the following location(s) in NaviPlan:

Enter Financial Data - Strategies - Debt Modification

Planning Objectives :: Procedures :: Related Information

Planning Objectives

ClosedWhat is the purpose of adding a strategy to a liability?
  • Add a debt modification strategy to a liability when you want to see how adding additional payments or increasing liability principal may affect a liability.
    • For example, if your clients have inherited a large sum of money, you may want to see how a one-time lump sum payment affects the amortization of the liability.
    • Note: If the Increase Principal option is not selected, the amount entered serves as a debt reduction amount. If the Increase Principal option is selected, the actual liability increases by the amount and frequency specified on this page.
  • A liability must already exist before a debt modification strategy can be added.

Procedures

ClosedHow do I model additional liability payments?
  1. From the Choose Liability menu, select the liability you want to modify.
  2. Click Add Debt Modification Strategy.
  3. Under Amount, enter the extra funds paid against the liability over and above the regular payment.
  4. Under Frequency, select how often the additional payments are made on the liability.
  5. Enter the dates on which the additional payments begin and end in the Start Date and End Date fields (respectively).
    Note: You can also use the Calendar to set start and end dates to an event (e.g. retirement or death).
  6. Clear the Increase Principal option. This option is only available for Interest Only or Last Period Payment payment types.
  7. If you want to index the additional payments, select the Infl option and enter a percentage under +/- Add'l.
  8. When you are satisfied with these options, click OK.
ClosedHow do I add to (or subtract from) the principal of an existing liability?
  1. From the Choose Liability menu, select the liability you want to modify.
  2. Click Add Debt Modification Strategy.
  3. Enter the Amount you wish to add to the existing payment.
  4. Enter information for the Frequency, Start Date, End Date, Infl, and +/- Add'l fields.
  5. Select the Increase Principal option to use the value in the Amount field to increase the principal of the loan. This option is only available with interest-only and last-period-payment type loans.
    OR
    Clear the Increase Principal option to use the value in the Amount field to reduce the principal of the loan.
  6. When you are satisfied with these options, click OK.
ClosedHow can I make changes to how surplus funds are directed?
  1. Go to the Debt Modification page (Enter Financial Data section - Strategies category).
  2. Click Surplus Cash Usage.
  3. Select either Surplus Saving or Surplus Expense and then use Move Up and Move Down to reorder the list.

Related Information




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