Loan Accounts

The Loan Accounts module manages the full lending lifecycle — from application through approval, disbursement, repayment, and closure.

Navigation: Loan Accounts → Operations

Sub-Pages

Page	Description
Accounts	View and manage active loan accounts
Applications	Submit and process loan applications

Loan Application Flow

1. Submit Application

1. Navigate to Loan Accounts → Operations → Applications
2. Click Create Application
3. Fill in the form:

Field	Description	Required
Client	Select the borrower (must be approved)	Yes
Loan Product	Select from configured loan products	Yes
Requested Amount	The amount the client is applying for	Yes
Loan Term	Duration in months	Yes
Purpose	Reason for the loan	No
Guarantors	Add guarantors if required by the product	Conditional
Collateral	Collateral details if required	Conditional

4. Submit the application

2. Approval

The application enters the approval workflow:

1. Application status changes to PENDING
2. Approvers at each configured approval level review the application
3. At each level, the approver can approve or reject
4. When all levels approve, the application is APPROVED

3. Disbursement

Once approved:

1. Open the approved application
2. Click Disburse
3. Select the disbursement method (cash, bank transfer, deposit account credit)
4. Confirm the disbursement

The system automatically:

• Creates a loan account with the disbursed amount
• Generates a repayment schedule
• Creates GL journal entries via the bound LOAN_DISBURSEMENT posting rule
• Updates the client's outstanding balance

4. Repayment

Repayments can be made through:

Method	Description
Cash	Teller receives cash and posts repayment
Bank Transfer	Repayment received via bank transfer
Account Debit	Automatic deduction from a linked deposit account

Each repayment is allocated to:

1. Penalties (if any outstanding)
2. Fees (if any outstanding)
3. Interest (accrued interest)
4. Principal (remaining amount)

GL journal entries are created automatically for each repayment.

Loan Account Details

Opening a loan account shows:

Section	Information
Summary	Outstanding balance, arrears, next due date, interest accrued
Repayment Schedule	Full schedule with expected and actual payments
Transactions	All disbursements, repayments, fees, and interest entries
GL Entries	Journal entries generated by this loan
Documents	Loan agreement, collateral documents
Activity Log	Audit trail of all changes

Account Statuses

Status	Description
ACTIVE	Loan is disbursed and being repaid
ARREARS	One or more repayments are overdue
CLOSED	Loan is fully repaid
WRITTEN_OFF	Loan has been written off as a loss
RESTRUCTURED	Loan terms have been modified

Interest Accrual

Interest accrues daily through EOD processing:

• Flat rate — Interest calculated on original principal
• Reducing balance — Interest calculated on outstanding balance

Accrued interest is posted to the GL via the LOAN_INTEREST_ACCRUAL posting rule.

Arrears and Penalties

When a repayment is overdue:

1. Arrears detection — EOD processing identifies overdue accounts
2. Penalty calculation — Penalties are applied based on product configuration
3. Notifications — Automated alerts can be sent to the client and loan officer
4. Collections — Overdue accounts are flagged for follow-up

Next Steps

• Shares & Equity — Share account management
• Reporting — Loan portfolio reports