Maintenance
Part of Fintech lending guide: from application to payoff
Digital credit offer and repayment-risk checklist
Digital credit checklist for lender identity, amount financed, APR, fees, payment schedule, cash flow, autopay, retries, reporting, servicing, and payoff.
What to take away
- Copy cost and payment terms from the final disclosure, not the ad.
- Test repayment against dated cash flow and a failed-debit scenario.
- Treat autopay, refinancing, reporting, collateral, and servicing as material terms.
- Keep evidence from application through payoff.
Use this checklist for a consumer digital loan or line. Coverage and disclosure rules depend on the product and facts, so route legal questions to qualified counsel.
Mark pass, fail, unclear, or not applicable. Do not accept an unclear material term merely because funding is urgent.
1. Identity and structure
- The legal creditor is named.
- The platform, broker, bank partner, and servicer are identified where involved.
- Contact and complaint channels work.
- The offer states whether credit is closed-end, open-end, secured, or unsecured.
- The state tied to the offer is clear.
- The advertisement and contract use consistent product language.
- Prequalification is distinguished from final approval.
2. Amount and proceeds
- Amount requested is recorded.
- Amount approved is recorded.
- Amount financed is recorded.
- Each fee deducted from proceeds is listed.
- Each fee added to the balance is listed.
- Net cash or purchase value received is calculated.
- Funding method and expected availability are confirmed.
Use:
Calculate net proceeds
- Record amount requested
- Record amount approved
- Record amount financed
- List fees deducted from proceeds
- List fees added to balance
- Approved amount - withheld charges = net proceeds
- Confirm funding method and availability
Then verify whether the contract defines the amount financed differently under applicable disclosure rules.
3. Price disclosures and cost example
Federal Regulation Z's closed-end credit disclosure section addresses items such as amount financed, finance charge, APR, variable-rate features, payment schedule, total of payments, late charges, and security interests for covered transactions. Use the actual provision and product facts rather than assuming every line or advance receives the same disclosure format.
The specific closed-end disclosure rule is 12 CFR 1026.18.
For a worked cost example, a $2,000 12-month installment loan with a $200 finance charge has an APR near 18% and total of payments of $2,200. A $2,500 12-month loan with a $500 finance charge has an APR near 35% and total of payments of $3,000. These are illustrations, not quotes.
Open-end lines of credit, such as credit cards and some personal lines, fall outside the closed-end format in 12 CFR 1026.18 and use different Regulation Z disclosures.
Why this matters: price terms drive the total cost and any affordability test.
Copy price disclosures exactly
- Interest rate copied exactly
- APR copied exactly
- Finance charge shown in dollars
- Total of payments recorded
- Fixed or variable rate identified
- Index, margin, caps, change timing recorded
- Origination, access, annual, subscription, documentation, late, returned-payment fees listed
- Optional insurance or add-ons separated
4. Payment schedule
- Number of payments is known.
- Amount of each scheduled payment is known.
- First and final due dates are known.
- Irregular or balloon payments are highlighted.
- Weekend and holiday handling is stated.
- Partial-payment application is explained.
- Extra-payment application is explained.
- Payoff quote method and validity period are available.
Sample payoff: after six on-time payments on a $2,000 12-month loan at 18% APR, the remaining balance is about $1,045 plus per-diem interest and any fees. The contract's interest method and payoff quote control the exact figure.
5. Dated cash-flow test with worked example
Make one row per due date for the first three months and every unusual month after that. Subtract essential bills, other debt, and the new payment from income available to get the buffer. A negative buffer means the payment does not fit that due date.
Dated cash-flow test
| Due date | Income available | Essential bills | Other debt | New payment | Buffer |
|---|---|---|---|---|---|
| Jan 15 | 3,200 | 1,450 | 300 | 183 | 1,267 |
| Feb 15 | 3,200 | 1,450 | 300 | 183 | 1,267 |
| Mar 15 | 3,200 | 2,150 | 300 | 183 | 567 |
Why this matters: a single tight month can trigger a missed payment even when the annual total looks affordable.
Run the dated cash-flow test
- One row per due date for first three months
- Every unusual month after that
- Payment fits without using a new loan
- Final payment fits
- Lower-income month tested
- Emergency expense tested
- Day after payment still covers essentials
6. Autopay and payment authorization
- Autopay is identified as required or optional.
- Any rate discount tied to autopay is quantified.
- Funding account and debit method are correct.
- Fixed or varying debit amount is clear.
- Retry and re-presentment policy is known.
- The method for changing the account is known.
- The method for revoking payment authorization is known.
- The contract consequence of revocation is understood.
Stopping an electronic debit does not cancel the credit obligation.
Control autopay authorization
- Autopay required or optional
- Autopay rate discount quantified
- Funding account and debit method correct
- Fixed or varying debit amount clear
- Retry and re-presentment policy known
- Method for changing account known
- Method for revoking authorization known
- Contract consequence of revocation understood
7. Repeated payment attempts
The CFPB's Payday Lending Rule FAQs explain coverage categories and payment-transfer and notice topics for loans within that rule. Use the current rule and facts to determine coverage; do not apply its requirements to every digital loan by analogy.
The rule is 12 CFR Part 1041. The 2020 final rule revoked the mandatory underwriting provisions. The payment provisions have a compliance date of June 13, 2022. Check the CFPB's rule page for any later delay or change.
- The product's retry limit is disclosed.
- Notice timing and channel are known where applicable.
- The borrower can update or replace a payment method.
- A failed debit does not trigger uncontrolled retries.
- Lender and bank fees are included in the failure scenario.
- Support can identify each attempted debit.
Sample retry scenario: a $183 payment fails on the 1st, a retry on the 3rd adds a $30 late fee, and a second failure on the 5th adds a $25 bank NSF fee. Those are typical ranges, not quotes.
8. Underwriting and data
- Application fields are accurate.
- Credit-report authorization is understood.
- Connected-account scope is limited.
- Income and employment sources are identified.
- Fraud signals are separated from credit criteria.
- Decision records retain source and time.
- Adverse-action reasons can be tied to real inputs and rules.
- Incorrect input data has a correction route.
9. Refinancing, extension, and repeat use
- Extension fees and new due dates are explicit.
- Refinancing creates a separate before-and-after schedule.
- Old payoff, new cash, and new fee are shown.
- A new advance does not silently refinance an old balance.
- Repeat borrowing limits and cooling-off terms are known.
- The plan reaches zero without another loan.
Calculate cumulative cost from the first loan, not only the current contract.
10. Collateral and account access
- Collateral is specifically identified.
- Lien filing and release are explained.
- Account setoff or security terms are reviewed.
- Device access is not confused with collateral.
- A connected bank account does not grant unexplained data or payment scope.
- Recovery from a lost phone or email account is tested.
11. Reporting and collection
- Application inquiry type is known.
- Positive and negative payment reporting are described separately.
- Reporting companies are named where applicable.
- Delinquency and charge-off timing are documented.
- Collection placement and contact path are known.
- Incorrect reporting has a dispute route.
- Statements preserve principal, interest, fees, payments, and credits.
12. Servicing evidence
- Signed agreement and disclosures are saved.
- Funding record is saved.
- Payment authorization is saved separately.
- Statements can be downloaded.
- Payment confirmations include date, amount, method, and reference.
- Support provides case numbers.
- Hardship options, if offered, are documented before acceptance.
- A final zero-balance or closure confirmation is available.
Stop conditions
Do not proceed when:
- lender identity cannot be verified;
- final APR or payment schedule is missing;
- proceeds are materially lower than expected;
- the payment fails the dated cash-flow test;
- the interface changes terms at acceptance;
- support cannot explain a mandatory fee;
- the contract includes collateral the borrower did not intend;
- repayment depends on immediate refinancing.
Common questions
Is a small payment enough to show affordability?
No. Test the full schedule, term, total cost, and remaining cash after each due date.
Is autopay a credit term?
It can affect payment operation and sometimes pricing, so review its authorization and consequences.
Should I include optional tips or subscriptions?
Include every amount needed in practice to obtain or use the product, and ask why it is presented as optional.
What proves payoff?
Keep a dated payoff quote, payment confirmation, final statement, and zero-balance or closure record.
