Loan Product in Frappe HR: Defining Types of Employee Loans
A Loan Product defines a type of loan you offer to employees, its interest rate, maximum amount, repayment method, and the accounts it posts to. (In earlier versions this was called Loan Type.) You set up a product once, and every loan of that kind is created from it with consistent terms.
You will find it under Home > Human Resources > Loans > Loan Product.
BEFORE YOU START
Have your Company and the relevant accounts ready (the loan, interest income, and any penalty accounts), since a loan product maps to these for posting.
How to create a Loan Product
- Open the Loan Product list and click New.
- Enter the Loan Product name and select the Company.
- Set the Maximum Loan Amount and the Rate of Interest (and any penalty interest rate).
- Define the repayment method, whether it’s a term loan with a repayment schedule, and how repayments are structured.
- Map the accounts (loan account, interest income account, and others).
- Save, then Submit.
What the product controls
The product sets the boundaries and behaviour for loans of its kind how much can be borrowed, at what interest, how it repays, and where it lands in your accounts. When an employee applies, these terms flow into their loan application automatically, so you’re not re-entering rates and limits each time.
TIP
Create a product for each genuinely different loan you offer a salary advance, an emergency loan, a vehicle loan each with its own rate and limit. Clear products keep employee loans consistent and the accounting clean.
Related Topics
- Loan Application
- Loan
- Loan Repayment
- Loan Interest Accrual
SUMMARY
A Loan Product (formerly Loan Type) defines a type of employee loan, its maximum amount, interest rate, repayment method, and accounts. Create one with a name, company, limits, rates, repayment structure, and account mappings, then submit. Its terms flow automatically into loan applications, so each loan of that kind is consistent. Set up a distinct product for each different loan you offer.
