Loan Application
A Loan Application records money lent to an employee, repaid over time from salary. It captures what was borrowed, on what terms, and the instalment that payroll will deduct each month.
Where to find it
Go to HRM > New > Loan.
Advance Salary Vs Loan
| Loan | Advance Salary | |
|---|---|---|
| Term | Long term, repaid over months. | Short term, recovered from the next salary or two. |
| Interest | May carry interest. | Generally interest-free. |
| Source | Company lending to the employee. | An advance against pay already being earned. |
| Setup | Requires a loan type and loan allowance. | No prior setup needed. |
Choose deliberately. A long repayment recorded as an advance distorts both the employee's pay and the liability you are carrying, and the two post to different accounts.
Loan Allowance
Loans depend on a loan allowance existing first, created in Allowances Setup. That allowance is what the loan type is built on, and what payroll uses to deduct the repayment.
Monthly EMI Range Settings
The loan type defines the instalment range permitted — the minimum and maximum monthly repayment. Applications outside that range are refused, which stops a loan being set up on terms the employee cannot sustain.
Field reference
| Field | Description |
|---|---|
| Employee | Who is borrowing. |
| Loan Type | Which scheme, carrying its own EMI rules. |
| Amount | The sum lent. |
| Instalment | The monthly repayment, within the type's range. |
| Start Month | When deductions begin. |
Related pages
- Loan Approve — approving applications
- Loan Entry View — one loan in detail
- Loan Type · Allowances Setup — set up first
- Advance Salary — the short-term alternative