Terms Glossary

1. Interest

• Definition: Interest refers to the cost of borrowing money, calculated on the outstanding principal balance. In Hypercore, this specifically refers to regular cash interest that is usually paid periodically.

• Alternative Names: Cash Interest, Simple Interest, Serviced Interest

• Key Features: Calculated on principal balance, may also apply to outstanding compounding balance

2. PIK/Compounding Interest

• Definition: Interest that, instead of being paid in cash, is added to the loan balance and begins accruing interest itself.

• Alternative Names: Payment in Kind (PIK), Capitalized Interest, Rollover Interest

• Key Features: Increases loan balance over time, stored separately in Hypercore's Outstanding Compounding Interest Balance

3. Flat vs. Floating Rate

• Definition: Describes how interest rates are determined throughout the loan term. Flat rates remain constant, while floating rates vary based on market indices.

• Components: Floating rates consist of Base Rate (market index) plus Margin (lender's premium)

• Common Indices: SOFR, Prime Rate, EURIBOR

4. Effective Date vs. Transaction Date

• Definition: Two distinct dates that track when financial events occur and when they impact calculations.

• Effective Date: When an event impacts interest calculations and reporting

• Transaction Date: When the event actually occurred in real-world terms

5. Interest Deposit

• Definition: A portion of the loan amount set aside specifically to cover future interest payments.

• Alternative Names: Retained Interest, Interest Reserve, Advanced Interest

• Function: Automatically covers interest payments until depleted

6. Disbursement

• Definition: The process of releasing loan funds to the borrower, marking the beginning of interest accrual.

• Alternative Names: Drawdown, Advance, Fund Release

• Features: Can be single or multiple, may include retained amounts for fees or interest reserves

7. OID/EIR

• Definition: Methods of calculating the true cost of borrowing and loan discounts.

• EIR: Effective Interest Rate - reflects total borrowing cost including fees and interest

8. Advanced Payment vs. Payment in Arrears

• Definition: Timing options for loan payments relative to the period they cover.

• Advanced Payment: Made before the covered period begins

• Payment in Arrears: Made after the covered period ends

9. Penalties and Fees

• Definition: Additional charges that may apply to the loan.

• Penalties: Charges for non-compliance or late payments

• Fees: Standard service charges for loan administration

• Treatment: Often have different repayment priorities

10. Early Redemption

• Definition: The process of fully repaying a loan before its scheduled maturity date.

• Alternative Names: Payoff

• Key Aspects: Includes calculation of all outstanding amounts

• Features: May involve early payment penalties

11. Write-Off

• Definition: The process of removing unpaid loan balances from financial records.

• Types: Can be partial or complete write-offs

• Impact: Affects financial reporting and loan portfolio management

12. Waiver

• Definition: The formal process of forgiving certain loan amounts or requirements.

• Applications: Can apply to principal, interest, fees, or penalties

• Implementation: May be manual or automated based on conditions

13. Equal Installments vs. Equal Principal

• Definition: Different approaches to structuring loan repayments.

• Equal Installments: Fixed total payment amount with varying principal/interest split

• Equal Principal: Fixed principal amount with decreasing total payments

14. Frequency

• Definition: The timing intervals for various loan events and calculations.

• Applications: Applies to payments, interest calculations, and fee assessments

• Common Options: Monthly, quarterly, semi-annual, annual

15. Deposit

• Definition: A deposit in Hypercore refers to funds charged to the borrower and held upfront, often at disbursement. These are not part of the disbursed loan amount but are retained to cover future obligations or risks.

• Alternative Names: Reserve (Interest Reserve), Retentions, Security Deposit

• Use Cases: Commonly used for holding back funds to cover future repayments, mainly interest

16. Outstanding

• Definition: The outstanding balance (or simply “outstanding”) is the total amount owed by the borrower at a specific point in time. This includes: principal, accrued interest, and any unpaid fees or penalties.

• Distinction: Differs from the principal balance, which reflects only the unpaid principal amount.

17. Aging

• Definition: Aging in Hypercore refers to the categorization of overdue borrower obligations (principal, interest, fees) into defined time buckets (30,60,90,120) based on the difference between expected schedule dates and actual repayments.

• Alternative Names: Delinquency Buckets, Arrears Aging, Past-Due Analysis

• Use Cases: Monitoring portfolio health, Identifying at-risk loans for collections or restructuring, Supporting compliance and reporting requirements on delinquency, Generating borrower statements that include overdue breakdowns.

18. Non-Accrual Period

• Definition: In Hypercore, a non-accrual period refers to any period during which a loan stops accruing interest and/or principal—typically due to a grace period, default, or impairment. It can be configured either as a temporary pause (grace period) or as a permanent status (defaulted loan) to prevent further interest calculations from a specific date.

• Alternative Names: Grace Period, Defaulted Loan, Impaired Loan, Interest Suspension, Non-Interest Accrual

• Use Cases: Setting up grace periods where no interest or principal accrues for a defined duration. Stopping interest accrual when a loan becomes defaulted or impaired. Adjusting loan terms to reflect 0% interest rates during non-accrual phases. Maintaining accurate schedules and performance reporting for paused or defaulted loans.

19. DDTL (Delayed Draw Term Loan)

• Definition: A Delayed Draw Term Loan is a committed term facility where the borrower can draw funds in multiple advances within a defined availability window, up to an overall commitment. Unlike revolving credit, each draw becomes part of a fixed-term balance; interest accrues only on amounts actually drawn. The undrawn portion of the facility may incur an unused/commitment fee.

• Alternative names: Delayed draw facility; drawdown term loan; DDTL. (Also associated fee names you may see: undrawn commitment fee; unused line fee; non-utilization/availability fee.) 📄 Loan Fees

• Use cases: Private credit transactions where capital is deployed in stages; Real estate/project finance with milestone-based funding; Acquisition/growth financing with staggered cash needs.

• Additional details: For unused/commitment fees on the undrawn portion, configure a recurring Fee using a calculation method based on unutilized amounts and set a monthly or quarterly charge cadence. See 📄 Loan Fees for supported calculation and timing options

20. Remittance Instructions

• Definition: Remittance instructions specify how and where payments should be sent or received for a given loan or borrower. They typically include bank details, account numbers, routing codes, and other payment-specific information to ensure funds are directed correctly.

• Alternative names: Payment instructions, bank details, remittance details.

• Use cases: Defining bank account details for loan repayments or disbursements; Providing borrower payment information to lenders or investors; Storing recipient banking information for borrower settlements.

• How it's managed in Hypercore: Remittance instructions can be stored in two main ways, depending on your workflow: Custom Properties (Dynamic/Additional Info) or Data Tables, at either the Borrower or Loan level - depending on whether the payment details apply to one entity or multiple loans. See also: 📄 Data Tables and Dynamic (Custom) Properties