How to Set and Apply a Prepayment Penalty
This guide shows System Admins how to enable the prepayment-penalty setting on a program, and shows users how to enter the term and amount (or select a plan type) in a loan file. It also covers an optional business-rule setup to auto-set values.
Part A — (System Admin) Enable prepayment penalty on a program
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Log in as a System Admin, then to Settings > Programs.
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To edit an existing program, click the edit pencil (or click Create New Program to add a new one).
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In the program manage view, open Additional.
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Toggle Prepayment Penalty ON.
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Click Save.
Tip: If you don’t see Prepayment Penalty fields in the loan file, check that the Prepayment Penalty toggle is enabled on the program.
Part B — Enter prepayment penalty in a loan file
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Open the loan file and go to Loan and Property or Overview > Terms & Mortgage.
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Select a program that has Prepayment Penalty enabled, then click Save.
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Then, go to Loan Additional > Underwriting.
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Enter the Prepayment Penalty Term (months).
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Enter the Prepayment Penalty Amount ($).
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Choose a Prepayment Penalty Plan Type from the dropdown. Only plan types supported by the compliance engine will appear in the dropdown.
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Click Save.
Part C — (System Admin) Use Business Rules to Auto-Set Prepayment Penalty Term and Amount
Enable the Built-In Business Rule
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Log in as a System Admin and go to Settings > Business Rules.
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Search for PPP (Prepayment Penalty) to find the built-in Set Value rule.
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Click the edit pencil to review next to the business rule to review Triggers and Actions value.
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Toggle the rule Active ON and Save.
Create or Copy a Custom Business Rule
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In Settings > Business Rules, click the Copy button next to the PPP rule, or click Create New Business Rule in the top right.
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Set your own triggers and action values based on your needs (e.g., product, state, or channel).
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Toggle the rule Active ON and click Save.
Resources
👉 Step by step guide on How to Enable, Customize, or Create a Business Rule
👉 Step by step guide on How to Manage Program Settings
Compliance reminder
Prepayment penalty limits—both term and amount—can vary by state, investor, and loan program.
⚠️ Important: The system does not validate or prevent entries above state maximums. The built-in business rules are provided as examples only. Always confirm final terms with your compliance or legal team before applying them in a loan.