[FINERACT-1307] Loan Ideal disbursement to calculation cause to wrong interest rate

• Type: Bug
• Status: Open
• Priority: Minor
• Resolution: Unresolved
• Fix Version/s: 1.11.0
• Component/s: Loan
• External issue URL: https://github.com/apache/fineract/pull/1562
• Assignee: eitan frailich
• Reporter: eitan frailich
• Created: 31/Jan/21 14:52
• Updated: 22/Aug/24 16:00

Description

ISSUE
My issue/bug happens when I am setting "First repayment on" field I get a repayment schedule with a wrong interest rate for the first installment.
Example: When I set "First repayment on" to 01/02/21 and expected disbursement is 27/1/21(Frist image) then I get the wrong interest.The first installment interest is 21,232.88$ (second Image) - calculated for the entire month (31 days) instead of 5 days (the time from the disbursement to the first repayment), the right interest should be 3424.75$.

After debugging:
In AbstractLoanScheduleGenerator there is a function calculateInterestStartDateForPeriod - it uses the idealDisbursment for setting the interest start date for the first installment, The idealDisbursment is calculated by idealDisbursementDateBasedOnFirstRepaymentDate which does [{{firstRepaymentDate}} - 1 repayment Period Frequency] aka, for 01/02/21 with months as repyment frequency it will return 01/01/21.

So when we dont set the "First repayment on" the idealDisbursment will be the expected disbursement date because the first repayment is always expectedDisbursment+1. But if we set the  "First repayment on" we get the wrong value for the idealDisbursment - in my example we got 01/0/21 and this is why the first installment interest was calculated for an entire month instead of  5 days.

Is it a bug or not?
I am not sure why idealDisbursementDateBasedOnFirstRepaymentDate exists, the simple solution is to do  idealDisbursment=expectedDisbursmentDate.I tried it locally and looks like it works, I will be happy to make a PR, but want to make sure indeed that the idealDisbursementDateBasedOnFirstRepaymentDate is redundant.

Issue Links

• Blocked: FINERACT-1305 Release Apache Fineract v1.5.0