DESCRIPTION
Loan Management module helps you manage your loans right from Loan Application to Loan Closure. You can track disbursements, repayments, security pledging and unpledging, loan interest accrual and much more.
REMINDER
Make sure that employee, chart of accounts and salary component have been set first.
Set this Doctype before Payroll Entry.
I. Loan Type List
Loans can be categorized into different types based on their specific characteristics.
Step 1:
On the search bar, type Loan Type List
Step 2:
Click Add Loan Type button
Step 3:
Input Loan Type Name, Company, and Loan Category (Regular/Government/Cooperative). Tick and Fill which field applies.
Step 4:
Input the chart of accounts that applies to the following fields:
Step 5:
Click Save
Step 6:
After saving the new Loan Type, it can now be shown and selected in Loan Applications/Loan List: Loan Type drop down
II. Loan List
Input the employees existing/ongoing loan deductions in payroll. This is where approved loan applications repayment records are created as well.
Step 1:
On the search bar, type Loan List
Step 2:
To Add an Existing/Ongoing Loan:
Input Applicant/Employee's name, Company, Loan Type, Date Granted , Payment Date, Loan Amount (same to Loan Balance), and Repayment Start Date.
Select Repayment Method:
Repay Fixed Amount per Period - the approver will define the Monthly Repayment Amount (amortization), the system will define the number of periods
Repay Over Number of Periods - the approver will define the periods, the system will compute how much the Monthly Repayment amount will be
Tick Repay From Salary if it will be deducted in payroll.
Step 3:
Click Save
Step 4:
Check Repayment Schedule
Step 5:
Validate if all details are correct, then click submit
Step 6:
Status of Loan will be changed into Sanctioned from Draft Status. It will be automatically deducted from payroll based on repayment schedule if Repay From Salary is ticked from the initial setup.
III. Loan Application Approval
Approval process for Loan Applications.
Step 1:
On the search bar, type Loan Application List
Step 2:
Click on the Loan application that must be approved. (Make sure you are the approver of the employee)
Step 3:
Click Actions, then click Reject or Approve. Upon approval, the cancel button will start to appear if you wish to cancel the approved application.
Upon approving the Loan Application, ERPNext system will prompt you to set up Repayment Details. The notification links the Loan Document where you can supply the details
Step 4:
On the linked Loan Document:
Enable Repay from Salary if you prefer the Loan to be deducted from applicant’s payroll.
As an Approver, you may update the Loan Amount
Select Repayment Method:
Repay Fixed Amount per Period - the approver will define the Monthly Repayment Amount (amortization), the system will define the number of periods
Repay Over Number of Periods - the approver will define the periods, the system will compute how much the Monthly Repayment amount will be
Depending on the Repayment Method selected, fill out the rest of the Repayment Details
Note: Date Granted is automatically populated based on the date the Loan Application was approved
Step 5:
Click Save
Note: After Saving the Loan Document, you will notice that the Repayment Schedule has been plotted based on the set Repayment Method
Step 6:
Once all the information is done, you may click Submit
