Loan Repayment in Frappe HR: Recording Loan Repayments
A Loan Repayment records a payment made against a loan, reducing its outstanding balance. Each repayment is allocated between principal and interest, so the loan’s balance and the interest position stay accurate as the employee pays it back.
You will find it under Home > Human Resources > Loans > Loan Repayment.
BEFORE YOU START
There should be an active Loan for the employee, since a repayment is recorded against that loan.
How to create a Loan Repayment
- Open the Loan Repayment list and click New.
- Select the Loan being repaid.
- Set the Posting Date and the amount paid.
- The amount is allocated to principal and interest per the loan’s terms.
- Save, then Submit.
Repayments via salary
For employee loans, repayments most often come through salary deductions a loan repayment component on the salary structure deducts the agreed amount each pay cycle and posts it as a Loan Repayment against the loan. Employees can also make a direct repayment, for example to settle a loan early. Either way, the loan’s outstanding balance falls accordingly.
TIP
When an employee wants to close a loan early, record a direct repayment for the outstanding balance rather than waiting out the schedule. The loan settles cleanly, and future salary deductions for it stop automatically.
Related Topics
- Loan
- Loan Product
- Loan Application
- Loan Interest Accrual
- Salary Component
SUMMARY
A Loan Repayment records a payment against a loan, allocated between principal and interest, reducing the outstanding balance. Create it by selecting the loan, setting the posting date and amount paid, and submitting. For employee loans, repayments usually come via salary deductions through a repayment component, though direct repayments (such as early settlement) are also supported. Each repayment keeps the loan’s balance and interest position accurate.
