> For the complete documentation index, see [llms.txt](https://docs.xyb.co/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.xyb.co/credit/disburse-and-manage-credit-contracts.md).
# Disburse & Manage Credit Contracts
Once you've configured your credit products and defined your service-level settings, you're ready to disburse credit contracts to your customers. A credit contract is the final step in the credit lifecycle, it binds a configured product to an individual customer, enabling fund disbursal, repayment tracking, and lifecycle monitoring.
This article walks you through the end-to-end process of creating and disbursing a credit contract in the XYB platform.
***
### Prerequisites
Before disbursing a contract, make sure the following are set up:
* **Global settings configured:** Currencies, interest calculation settings, collateral types, tax rules, and credit purposes. [Learn more](/credit/configure-and-create-credit-products/configure-global-settings-for-credit-products.md)
* **Product configuration completed:** A credit product (e.g., personal loan, BNPL, microloan) should already exist under *Product Configuration > Products*. [Learn more](/credit/create-a-credit-contract-product.md)
* **Customer account created:** The borrower must exist as an entity with a valid payment account in the system. [Learn more](/credit/create-and-manage-contracts/manage-entities-for-credit-products.md)
***
### Create and Disburse a Contract
**1. Navigate to the Contract Module**
Go to the **Contracts > Lending** section and click **+ New Contract**.
***
**2. Select Customer and Product**
* **Customer:** Choose an existing customer (e.g., John Doe).
* **Product group:** Select the product group (e.g., Loan, BNPL).
* **Product name:** Choose the pre-configured credit product (e.g., Personal Loan).
* **Credit payment account:** Select the customer's account that will be used for repayments.
***
**3. Define Contract Duration**
* **Start Date / End Date:** Choose contract duration.
* **Contract period type:** Define whether the schedule is in *Months, Weeks*, etc.
* **Schedule type:** Choose from repayment schemes like *Annuity, Bullet, Balloon*, based on the product setup.
* **Day of the month:** Sets the due date for each installment.
***
#### 4. Add Contract Purpose
* **Purpose:** Select from predefined contract purposes such as *Home Renovation, Business Loan,* etc. (configured at the service level).
***
#### 5. Set Amounts
* **Amount:** Total loan disbursal amount.
* **Limit amount:** Sets the upper bound, especially for revolving products like credit cards.
***
#### 6. Configure Interest Terms
* **Principal interest margin (%):** Margin added over the base rate.
* **Interest base rate & method:** Pulled from interest service configuration.
* **Penalty rate:** Applied on overdue payments.
* **Day count conventions:** Used for accurate interest accrual.
* **First payback periods:** Define when repayments begin.
*Note:* These values are pre-governed by your **Interest Service**, so ensure it’s preconfigured for consistent behavior.
***
#### 7. Set Repayment Frequencies
* **Principal frequency:** Monthly, quarterly, etc.
* **Interest frequency:** Defines how often interest is paid by the customer.
***
#### 8. Add Fee
You can attach fees directly to individual credit contracts during creation or updates.
To add a fee:
* Select the **Fee Type** (e.g., Disbursement fee)
* Give it a clear **Fee Name** (e.g., Payout fee)
* Define when the fee applies (e.g., **On contract payout**)
* Choose a **Calculation Method** (e.g., Fixed amount, % of principal)
* Enter the **Fee Amount** and a **Start Date**
#### 9. Finalize & Activate
Once all details are filled:
* Review the contract summary
* Click **Create Contract** to activate it
* The contract now appears in the contract list and is automatically linked to repayment tracking, interest accrual, and fee collections
***
### Monitoring and Lifecycle Management
Once disbursed, every contract has a dedicated overview page that includes:
* **Financial breakdown:** Principal, interest, penalty, and receivable balance
* **Transaction logs:** View all incoming payments and pending dues
* **Purpose & terms:** Quickly view contract type, dates, and scope
* **Print/Download:** Generate formal agreement documents
Learn more about:
[Managing Credit Contracts and Terms](/credit/create-and-manage-contracts/manage-credit-contracts-and-terms.md)
[Viewing and Managing Day Changes in the Console](/credit/create-and-manage-contracts/viewing-and-managing-day-changes-in-the-console.md)
[Manage Contracts in Debt](/credit/create-and-manage-contracts/manage-contracts-in-debt.md)
***
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