Approving & Disbursing a Loan
When an employee applies, the assigned approver (a department, a specific person, or any admin) is notified and reviews the request. This article is written for the approver/HR.
Where to review
Open HR → Loans, find the Pending request, and open it (or use the Approve / Reject actions in the list). The detail page shows Section I (the employee's request, purpose, documents and signature) and Section II (the HR decision).
Permission note: You can approve if you have the Approve Loan permission (admins do) or you are the specifically assigned approver.
Approving
Choose Approve and complete:
| Field | Notes |
|---|---|
| Approved Amount | The amount actually granted (may differ from what was requested). |
| Number of Installments | How many months to repay over (defaults from the loan type). |
| Deduction Method | How the monthly deduction is calculated — see below. |
| Deduction Value | For "Fixed Amount" the amount per month; for "% of Basic" the percentage. |
| Interest Rate (%) | Optional; added to the total payable. |
| Loan Issue Date | The disbursement date. Repayment deductions begin the following month. |
| Authorized Signature | Sign to authorise (Section II). |
Deduction methods:
- Equal Installments (over term) — the total payable is split evenly across the installments.
- Fixed Amount / month — a set amount is deducted each month until repaid.
- % of Basic Salary / month — a percentage of the salary is deducted each month until repaid.
On approval the system automatically:
- computes the monthly installment, total payable and outstanding balance;
- builds the month-by-month repayment schedule;
- generates the signed PDF agreement (both signatures + the terms as they were at signing) and stores it in the HRM;
- notifies the employee.
Rejecting
Choose Reject and enter a reason. The employee is notified and the loan is marked Rejected.
The signed agreement
Once approved, both the employee and HR can Download Signed Agreement from the loan's detail page. It contains the employee's details, the approved terms, both signatures, and the frozen terms & conditions.
Prepayment
If an employee wants to pay down early, open an active loan and use Record Prepayment to enter an amount. It reduces the outstanding balance immediately (and closes the loan if it reaches zero). See Repayment & Payroll.