You can create loan products to match your business requirements and the types of loans you want to offer. A loan product defines the options and rules individual loans inherit, including how often repayments are due, how interest is calculated, what limits apply, and so on. Loan products act as templates for your loans, so configuring them is a required first step before you can create individual loans.

It's possible to create multiple loan products to distinguish and grow your lending portfolio. For example, you might create one Buy Now, Pay Later (BNPL) loan product for a group of similar items in your storefront, or build separate loan products for each individual item you sell. Later, as you add inventory, you can create new loan products.

Loan product types

You can create these types of loan products.

Personal

A personal loan is an unsecured loan issued to an individual and repaid over multiple installments. Its features include:

• Installments calculated using a reducing balance
• Weekly, biweekly, monthly, or quarterly repayment plans
• Auto‑collection from a bank account or card
• Partial repayment options that adjust installment amount or loan terms
• Early full repayment options

Example: A customer wants to renovate their kitchen and takes out a personal loan to cover $15,000 in remodeling costs, then repays the loan over a set period with fixed monthly payments.

BNPL

A BNPL loan is an unsecured loan issued at checkout for a purchase amount. Its features include:

• Interest‑free periods
• Biweekly or monthly repayment frequencies
• Disbursement directly to merchants
• Auto‑repayment from a bank account or card
• Contract cancellation for returns
• Charges for missed payments or post‑promotion interest
• Live data streams for notifications, reporting, and artificial intelligence and machine learning integrations
• In some regions, BNPL loans are not subject to credit checks. Confirm whether this applies in your region.

Example: A customer buys a $600 smartphone and chooses Buy Now, Pay Later at checkout. The total purchase price is split into four equal payments. They pay the four installments over the next four months.

Loan configuration options

When creating your loan products, in addition to the loan type, you define various options, including:

• Disbursement options—How and when loan funds are released to the borrower. You can disburse in a single lump sum, through multiple payments, or let the lender handle disbursement outside of Pismo in the lender’s own system.
• Repayment options—How the Pismo platform calculates repayment schedules, including:
  • Repayment calculation method—The repayments are either flat, where borrowers pay the same amount each cycle, or reducing, where they pay a larger amount in the first cycle and a decreasing amount for each cycle after that.
  • Frequency—How often payments must be paid: biweekly, monthly, quarterly, and annually
• Interest rate options—Controls interest behavior, including:
  • Moratorium interest—Amortizes accrued interest over the remaining loan term
  • Interest-only installments—Allows reduced payments for part of the loan while keeping the loan principal amount unchanged
  • Early final settlement—Allows a single final repayment before the final scheduled payment date
• Grace period—The number of calendar days after an installment due date during which the Pismo platform does not apply late fees or mark the repayment as delinquent, between 0-365 days.
  
  During the grace period, the arrears counter still runs in the background, starting from the original due date. If the customer pays within the grace period, there is no impact to the customer and no late fees or penalties are charged. If the customer pays after the grace period ends, the arrears counter shows the days past due, and late fees or penalties are calculated from the due date.
• Rules—Set limits for these loan values:
  • Loan amount—Maximum amount that can be borrowed
  • Number of installments—Maximum number of installments used to split each repayment
  • Loan term length—Maximum time the borrower has to repay the loan
  • Interest rate —Maximum interest rate that can be applied to the loan amount
• Charge plan codes—Links service charges, fees, or taxes to a product or service