What is a Loan Register?
A loan register is a log or journal that is used to track the maturity dates associated with loans issued by a specific lender. The register is normally arranged in chronological order, making it very easy to determine what loans are coming due in the near future. A loan register functions as a maturity tickler file, alerting loan officers when to make contact with borrowers and remind them of the impending due date for the loan. Registers of this type are most helpful with time loans and other similar loans that involve balloon payments, rather than a series of monthly installments.
The actual structure of a loan register may vary somewhat, based on local custom. There are a few basic types of information that are likely to appear in any register of this type. First, the name of the borrower, along with the loan account number assigned to the borrower, will be recorded. The amount due on the loan is also listed. Finally, the date that the loan comes due is listed and normally used to sort the entries into chronological order.
Some lenders prefer to add additional data to the loan register, normally for internal purposes. For example, a lender may choose to add contact information for each loan listed in the register, such as a mailing address and a telephone number. This helps to expedite the process of generating a reminder letter to the borrower, or making a telephone call to remind the borrower that the due date is fast approaching.
A loan register can usually be structured to include details for any cosigners or co-borrowers listed on the loan. Depending on the policies and procedures of the lending institution, reminders and notices that the maturity date for the loan is upcoming may be sent to both the primary borrower and the cosigner, or just to the primary borrower. If the due date passes without the receipt of payment, the lender may choose to use the data recorded in the loan register to alert the cosigner to the issue and request payment for the outstanding balance, plus any interest that began to accrue after the due date.
While the loan register of years past was kept as a hard copy record, most accounting software today provides the ability to create and maintain an electronic loan register, with some opting to use a simple spreadsheet format. This approach makes it very easy to also add comments or notes to each loan entered into the directory. In addition, many software packages provide the capability to flag loans for some type of communication at two week and one month intervals prior to the actual due date.
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