Introduction
In the real world, not every borrower’s financial journey is consistent. Some may prefer to repay more in one month and less in another, depending on income cycles, seasonal business, or investment returns. That’s where Variable Installments in loan products offer true flexibility.
Modern Loan Management Systems like CloudBankin allow lenders to support this by enabling the “Is Variable Installments Allowed?” option during product configuration. Let’s explore how this feature works, how it supports borrower flexibility, and what it looks like in action.
What Are Variable Installments?
Variable Installments allow borrowers to repay loans through non-uniform installment amounts across the tenure. Unlike standard EMI or equal principal repayment structures, the borrower can pay higher or lower amounts based on cash flow, as long as the overall repayment aligns with loan terms.
This model is especially useful for:
- Business loans with fluctuating revenues
- Seasonal industries like agriculture or tourism
- Salary-based repayments with planned bonuses
- Custom structured lending for corporate clients
How to Enable Variable Installments in CloudBankin
CloudBankin simplifies the process of offering variable repayments:
Product Configuration: Enable Variable Installments
While setting up the loan product, enable the “Is Variable Installments Allowed?” toggle. This allows you to offer editable repayment schedules per loan account.
Set Minimum Gap Between Changes
Define the minimum number of days/months allowed between variable installment adjustments. This ensures that changes are not too frequent and keeps schedules manageable.
Editing the Repayment Schedule
Once a loan account is created, CloudBankin offers the ability to manually edit the repayment schedule. This feature is available on the loan account screen and enables the following:
Edit Principal and Interest Amounts
You can directly update the principal due or even the interest amount for any future installment.
Validate the Schedule
After making changes, click the “Validate” button to ensure the updated schedule is mathematically and financially sound. This includes checking:
- Total principal adds up to the loan amount
- Interest calculations are accurate
- No violations of the minimum gap or overdue interest
Submit the Updated Schedule
Once validated, you can submit the new repayment schedule, and it becomes the official repayment plan for the loan. This offers tremendous flexibility without compromising audit readiness or compliance.
Comparing Standard vs. Variable Installment Schedules
Let’s take a look at two screenshots that illustrate the difference:
Standard Installment Schedule
In a regular schedule (e.g., equal installment), the installment amount is fixed every month—say ₹12,703—and both principal and interest portions vary automatically.
- Predictable cash flow
- Less flexible
- Suitable for salaried borrowers
Variable Installment Schedule
In a variable structure, as shown in the screenshot:
- Installment amounts differ (₹20,000 in the first month, ₹1,818 in others)
- Principal and interest can be changed manually
- The final installment adjusts to match the total repayment
This is ideal for borrowers who expect irregular income streams and want the ability to repay strategically.
Benefits of Variable Installments
For Borrowers:
- Greater control over repayment timing
- Align payments with business or seasonal cycles
- Avoid financial stress during lean months
For Lenders:
- Cater to broader borrower segments
- Customize repayment plans without changing product setup
- Reduce delinquency through tailored repayments
Use Cases for Variable Installments
- MSME Lending: Business owners can increase repayments post peak season
- Project Financing: Allows repayments to match cash inflow milestones
- Bonus-Linked Salaried Loans: Borrowers can schedule higher payments post appraisals
Compliance & Audit Consideration
Even with flexibility, CloudBankin ensures that all changes are logged, validated, and backed by system calculations. Every installment update is tied to:
- User action log
- Validation report
- Updated cost of loan and interest view
This maintains regulatory compliance while offering a user-friendly feature.
Final Thoughts
In a dynamic lending landscape, one-size-fits-all repayment structures no longer meet the needs of all borrowers. Variable installments offer flexibility, personalization, and better repayment success. With CloudBankin, enabling this is as simple as toggling a switch and managing edits through a guided interface.
Whether you’re serving MSMEs, seasonal workers, or dynamic income borrowers, variable installment loans are a powerful product differentiator.
- Email: salesteam@cloudbankin.com
- Sales Enquiries: +91 9080996606
- HR Enquiries: +91 9080996576
After smartphone penetration, people are not watching their SMS at all. They use SMS only for OTP related transactions. That’s it.
But What can a Lender see in your SMS after you consent to them?
Lender can see income, expenses, and any other Fixed Obligation like (EMIs/Credit Card).
1) Income – Parameters like Average Salary Credited, Stable Monthly inflows like Rent
2) Expenses – Average monthly debit card transactions, UPI Transactions, Monthly ATM Withdrawal Amount etc
3) Fixed Obligations – Loan payments have been made for the past few months, Credit card transactions.
It also tells the Lender the adverse incidents like
1) Missed Loan payments
2) Cheque bounces
3) Missed Bill Payments like EB, LPG gas bills.
4) POS transaction declines due to insufficient funds.
A massive chunk of data is available in our SMS (more than 700 data points), which helps Lender to make a credit decision.
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