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What for

A Line of Credit (LoC) is an account contract that enables bank customers to borrow funds freely up to a preauthorized limit amount. Customers then repay the borrowed funds in periodic installments that comprise any combination of interest, capital, and fees.
The localizations for banking services from SAP has developed the Line of Credit (LoC) solution. See below why it fits your business needs.


Why LoC

See below three reasons why the LoC functionality can benefit your product portfolio:

  • Bank customers can perform checking account operations in the same account in which a LoC is granted. For the localizations for banking services from SAP, a LoC account consists of a standard checking account with an active LoC feature. In this contract, in addition to standard functions, such as contract financial conditions (for example, fees and interest on withdrawn LoC funds) and collaterals (for example, a customer’s house to secure a LoC contract), you also use localization-specific functions.
  • Banks have the flexibility to generate billing of due amounts of the LoC at any time, with flexible installment composition. The availability of an account billing function works with account types other than loans.
  • Banks can enable the integration of multiple LoCs to cover the limit usage among the loan accounts through overdraft protection functions within banking services.

The Billing Engine: a Flexible Alternative to Customers and Partners

As part of the portfolio of the LoC product, the localizations for banking services from SAP offers the billing engine tool to provide our customers and partners the flexibility to implement and, if necessary, re-implement the billing of LoC amounts and their corresponding interest, insurance, and fees for a specific due date. Once billed, it is possible to generate open items in FI-CA and consequently, allow the banks to track the delinquent accounts through dunning processes.

See more information about the localizations for banking services from SAP for LoC in the SAP Help Portal.

If you are interested in this feature, contact our area Product Owner Carina Rosa <carina.rosa@sap.com>.

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