Loan Security Release
Loan Security Release is the process of removing the lender’s claim or lien on an asset that was pledged as collateral after the borrower fulfills the required loan obligations.
When a borrower provides securities such as property, vehicles, or other assets against a loan, these remain assigned to the loan until they are released. In Frappe Lending, assigned securities must be released before the loan can be closed.
Did You Know?
Security release ensures that collateral records are properly updated after loan completion and restores ownership rights of pledged assets to the borrower.
Accessing Loan Security Release
Loan security releases can be created from the Loan Security section in Frappe Lending.
Home > Lending > Loan Security > Loan Security ReleaseCreating a Loan Security Release
Follow these steps to release assigned securities from a loan:
- Open the Loan Security Release list.
- Click on Add Loan Security Release.
- Select the relevant Loan Account.
- Add the Loan Securities along with the quantity to be released.
- Save the security release entry.
Loan Security Release Details
| Field | Description |
|---|---|
| Loan Account | The loan account from which the assigned securities need to be released. |
| Loan Securities | The collateral or security assets that were previously assigned against the loan. |
| Quantity | The quantity or portion of the assigned security that needs to be released. |
Security Release Process
The security release process updates the collateral assignment records by removing the released securities from the active loan. This ensures that the loan closure process reflects the correct security status.
- Assigned securities remain linked to the loan until released.
- Security release updates the available collateral records.
- Loans with assigned securities must have those securities released before closure.
Note
Before closing a loan, ensure that all assigned securities or collaterals have been released as required.
Best Practices
- Verify the loan account before creating a security release.
- Release only the securities that are approved for removal.
- Confirm released quantities match the actual collateral records.
- Complete security release before attempting loan closure.
