Create Loan API

Create Loan API in Frappe Lending allows users to create and book loans through external applications. The API supports different repayment methods, including repayment based on a fixed number of periods and repayment based on a fixed amount per period.

Using this API, lenders can create loan records, configure repayment details, add loan charges, and automatically create disbursement entries during loan booking.

Did You Know?

Frappe Lending supports flexible loan booking by allowing repayment schedules to be defined either by tenure or by repayment amount.

API Endpoint

POST /api/resource/Loan

Loan Creation Based on Tenure

When repayment is defined by the number of repayment periods, use the Repay Over Number Of Periods method. The system generates the repayment schedule based on the selected tenure.

Request Body

{
    "applicant_type": "Customer",
    "applicant": "_Test Loan Customer 2",
    "company": "_Test Company",
    "posting_date": "2024-04-01",
    "docstatus": 1,
    "auto_create_disbursement_on_loan_booking": 1,
    "loan_product": "Term Loan Product 4",
    "loan_amount": 500000,
    "penalty_charges_rate": 25,
    "repayment_start_date": "2024-05-05",
    "repayment_frequency": "Monthly",
    "repayment_method": "Repay Fixed Amount per Period",
    "repayment_periods": 12,
    "loan_charges": [
        {
            "charge": "Processing Fee",
            "amount": 100,
            "treatment_of_charge": "Add to first repayment",
            "doctype": "Loan Disbursement Charge"
        }
    ]
}

Key Fields

Field	Description
Applicant Type	Defines whether the borrower is a Customer or another supported applicant type.
Applicant	Specifies the borrower associated with the loan.
Company	Defines the company issuing the loan.
Loan Product	Specifies the loan product configuration used for the loan.
Loan Amount	Defines the principal amount issued to the borrower.
Repayment Frequency	Defines the repayment interval, such as Monthly.
Repayment Periods	Defines the number of repayment installments.
Loan Charges	Defines additional charges applied during loan creation.

Loan Creation Based on Fixed Repayment Amount

When repayment is based on a fixed installment amount, use the Repay Fixed Amount per Period method. The system calculates the repayment tenure based on the configured installment amount.

Request Body

{
    "applicant_type": "Customer",
    "applicant": "_Test Loan Customer 2",
    "company": "_Test Company",
    "posting_date": "2024-04-01",
    "docstatus": 1,
    "auto_create_disbursement_on_loan_booking": 1,
    "loan_product": "Term Loan Product 4",
    "loan_amount": 500000,
    "penalty_charges_rate": 25,
    "repayment_start_date": "2024-05-05",
    "repayment_frequency": "Monthly",
    "repayment_method": "Repay Fixed Amount per Period",
    "monthly_repayment_amount": 30000,
    "loan_charges": [
        {
            "charge": "Processing Fee",
            "amount": 100,
            "treatment_of_charge": "Add to first repayment",
            "doctype": "Loan Disbursement Charge"
        }
    ]
}

Additional Field

Field	Description
Monthly Repayment Amount	Defines the fixed repayment amount to be collected in each repayment cycle.

Loan Charges

Loan charges can be added during loan creation using the loan_charges child table.

Field	Description
Charge	Name of the applicable charge.
Amount	Amount of the charge.
Treatment Of Charge	Defines how the charge is adjusted, such as adding it to the first repayment.
DocType	Defines the child document type as Loan Disbursement Charge.

Response

After successful loan creation, the API returns the created loan document details.

{
    "data": {
        "name": "ACC-LOAN-2026-00232",
        "applicant": "_Test Loan Customer 2",
        "company": "_Test Company",
        "loan_product": "Term Loan Product 4",
        "loan_amount": 500000.0,
        "status": "Sanctioned",
        "repayment_frequency": "Monthly",
        "repayment_periods": 12,
        "doctype": "Loan"
    }
}

Response Fields

Field	Description
Name	Unique identifier generated for the loan account.
Status	Shows the current loan status after creation.
Loan Amount	Displays the approved loan principal amount.
Disbursed Amount	Shows the amount already disbursed against the loan.
Rate Of Interest	Displays the applicable loan interest rate.
Total Payment	Shows total repayment amount calculated for the loan.
Total Interest Payable	Displays total interest expected over the loan lifecycle.
Loan Charges	Shows charges added during loan creation.

How It Works

Step	Description
1. Validate Loan Details	The system validates applicant, company, loan product, and repayment configuration.
2. Create Loan Record	A new loan document is created with the provided details.
3. Generate Repayment Schedule	The repayment schedule is generated based on tenure or fixed repayment amount.
4. Apply Charges	Configured loan charges are added to the loan.
5. Create Disbursement	If auto-create disbursement is enabled, the disbursement entry is created automatically.

Use Cases

The Create Loan API can be used for:

Creating loans from external lending portals.
Integrating loan origination systems with Frappe Lending.
Automating loan booking workflows.
Creating borrower-specific loan products.
Managing loan charges during origination.

Note

Ensure the selected Loan Product is properly configured before creating loans through API.

Best Practices

Validate borrower details before creating loans.
Use the correct repayment method based on business requirements.
Configure loan products before API-based loan creation.
Review loan charges before submitting the request.
Use proper API authentication and access controls.

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