Guide 06

Reference rates and prime

Each organisation has one reference rate, such as prime. Loans linked to it carry the reference rate plus their own spread, so one change moves them all from the same date.

Setting or changing the reference rate

1. Open Organisations and find the reference rate on the organisation.
2. Choose Set, enter the new rate and the date it takes effect, and add a note if you like.
3. Save. Loanbooq shows which loans the change affects.

You can set a change ahead of time; it takes effect on its date. History lists every rate the organisation has had.

How linked loans follow

A loan linked to the reference rate uses the reference rate plus its spread. When the reference rate changes, the loan's interest changes from the effective date. Months already posted are not changed.

Following the Reserve Bank's prime

For an organisation in South Africa, tick Follow the South African Reserve Bank's prime as this organisation's reference rate. Loanbooq then watches the published prime rate. When it changes:

• a notice appears on the Organisations page and on the bell;
• you apply the new rate, from the date it changed, in one click;
• the Post page warns you if any linked loans are still behind.

Nothing changes until you apply it, so you stay in control of your books.