Loan Operations

Loan Operations covers the day-to-day servicing actions performed after a loan account exists. These actions include disbursement, repayment, write-off, recovery, reversal, restructuring, interest activity, penalties, and adjustments.

Navigation: Loans > Operations > Loan Accounts

Workspace Reference

Workspace	How Users Reach It	What Users Usually Do There
Loan Accounts	Loans -> Operations -> Accounts	Open the loan account and perform account-level actions such as repayment, reversal, restructure, write-off, or recovery where allowed.
Loan Applications	Loans -> Operations -> Applications	Disburse approved applications and review application-to-account handoff.
Collections	Loans -> Operations -> Collections	Track overdue account follow-up before or after repayment actions.
Interest Suspense	Loans -> Operations -> Interest Suspense	Move doubtful interest to suspense or release it after approved recovery.
Accounting Review	Accounting -> Operations or Accounting -> Setup	Review posting setup, failed posting causes, and GL effects for loan actions.

Operating Principle

Loan actions should be processed from the loan account workspace so that balances, schedules, accounting status, approvals, and audit history remain connected.

Do not correct loan balances through manual journals unless finance policy explicitly requires an accounting-only adjustment. Operational corrections should normally use the loan action that matches the business event.

Disbursement

Disbursement releases approved loan funds to the borrower or to the selected settlement destination.

Before disbursing, confirm:

• The loan account is approved and ready for disbursement.
• The disbursement amount matches the approved terms.
• The selected payment channel is correct.
• Any required fees, insurance, taxes, or deductions are understood.
• The accounting period is open for posting.

Accounting effect in normal terms:

• Debit loan receivable for the amount owed by the borrower.
• Credit the funding source such as cash, bank, wallet, deposit account, or another configured settlement source.

After successful disbursement, the outstanding principal and repayment schedule should reflect the disbursed amount.

Repayment

Repayment records money received from the borrower and allocates it across outstanding loan components.

Typical allocation order is configured by product policy and may include:

• Penalties.
• Fees.
• Interest.
• Principal.
• Excess or advance payment handling.

Before posting a repayment, confirm:

• The payment source is correct.
• The repayment date is correct.
• The amount received matches the supporting evidence.
• The allocation preview is acceptable.
• The payment should be posted now, not held for later reconciliation.

Accounting effect in normal terms:

• Debit the settlement source that received the money.
• Credit the relevant loan balances such as principal, interest, fees, penalties, or taxes.

Write-Off

Write-off is used when a loan balance is no longer expected to be collected and policy allows it to be removed from active portfolio reporting.

Before writing off a loan, confirm:

• The account meets write-off policy.
• Required approvals are complete.
• Provisioning position has been reviewed.
• The write-off reason is clear.
• Supporting evidence is attached or referenced.

Accounting effect depends on provision status. Provisioned amounts normally reduce the provision balance first, while any unprovisioned amount is recognized through the configured write-off expense treatment.

Recovery

Recovery records money collected after a loan has been written off.

Before posting a recovery, confirm:

• The original loan was written off.
• The recovery amount and source are supported.
• The recovery should be treated as income or balance recovery according to policy.

Accounting effect normally records the received settlement source and recognizes recovery income or the configured recovery treatment.

Reversal

Reversal undoes a previously posted loan transaction.

Use reversal for mistakes such as duplicate posting, wrong amount, wrong account, wrong date, or incorrectly captured payment source.

Before reversing, confirm:

• The original transaction is the one that needs correction.
• The reversal reason is clear.
• The reversal date is allowed.
• Downstream actions based on the original transaction are understood.

Reversals should be processed through the UI so schedules, balances, statuses, and accounting history remain consistent.

Restructuring

Restructuring changes loan terms after disbursement, usually because borrower circumstances or approved policy changed.

A restructure may change:

• Repayment period.
• Installment amount.
• Interest rate.
• Schedule structure.
• Capitalized interest or fees.
• Principal treatment.

Before restructuring, confirm:

• The restructure is approved.
• Paid schedule rows should remain preserved.
• The previewed new schedule is acceptable.
• Accounting impact has been reviewed where balances move between components.

Interest And Penalties

Interest and penalties are normally driven by loan product settings and scheduled processing. Manual users should focus on reviewing results, handling exceptions, and applying approved adjustments.

For performing loans, interest may be recognized according to the product accounting method.

For non-performing or doubtful loans, interest may move to suspense or be restricted from normal income recognition depending on policy.

Penalties should only be applied where product rules and arrears status allow them.

Transaction Statuses

Status	Meaning
Pending	Created or prepared but not yet finalized.
Posted	Successfully processed and reflected in balances and accounting.
Reversed	The transaction has been undone through an approved reversal.
Failed	The action could not be completed and should be reviewed.

If posting fails, the user should review the message shown by the system. Most failures are caused by closed fiscal periods, missing accounting setup, incomplete product mappings, invalid settlement context, or approval restrictions.

Operational Checks Before Posting

Before posting any high-impact loan action:

• Confirm the account status allows the action.
• Confirm the period and business date are valid.
• Confirm the product setup supports the action.
• Confirm the borrower, amount, date, and payment source are correct.
• Confirm approval requirements are satisfied.
• Confirm accounting setup is complete for the selected product and channel.

Troubleshooting

If a loan action fails:

• Check whether the fiscal period is open.
• Check whether the loan account status allows the action.
• Check whether the selected settlement channel is configured.
• Check whether required product accounting mappings are complete.
• Check whether approval is still pending.
• Review the displayed failure message before retrying.

Do not retry repeatedly without understanding the cause. If the failure is an accounting setup issue, repeated attempts will normally fail until setup is corrected.

Related Guides

• Loan Products
• Loan Accounts
• Loan Collections
• Interest In Suspense
• Loan GL Setup