Creating a Loan

This guide walks you through the process of issuing a new loan to an employee or driver. Before the loan can be created, the system performs an eligibility check to ensure the borrower qualifies based on your company's lending policies.

How to Access

Navigate to Finance > Loan > Create Loan from the sidebar menu.

You can also open the Loan List page and click the "Create Loan" button in the top-right corner. Both options open the same loan creation form.

Before You Begin

Before creating a loan, make sure the following are in place:

• At least one loan type has been configured. Loan types define the limits and terms available for each loan. See Managing Loan Types for setup instructions.
• The borrower (employee or driver) exists in the system.
• You are aware of your company's lending policies regarding maximum amounts and concurrent loans.

Filling Out the Form

Complete the following fields to issue a loan.

Step 1: Select Borrower Type

Choose whether the borrower is an Employee or a Driver. This determines which list of people appears in the next step.

Step 2: Select Person

Choose the specific employee or driver from the dropdown list. The system will use this person's record to run the eligibility check.

Step 3: Select Loan Type

Pick a loan type from the dropdown. Each loan type has pre-configured limits and terms (maximum amount, maximum tenure, default interest rate). The selected loan type determines what values are allowed in the remaining fields.

Step 4: Loan Amount

Enter the total amount to be loaned, in AED. This value must not exceed the maximum amount defined by the selected loan type.

Step 5: Interest Rate

Enter the annual interest rate as a percentage. This can be set to 0% for interest-free loans such as salary advances. The default rate from the loan type is pre-filled, but you can adjust it if needed.

Step 6: Repayment Tenure

Enter the number of months over which the loan will be repaid. This must not exceed the maximum tenure defined by the selected loan type.

Step 7: Monthly Installment

This field is automatically calculated based on the loan amount, interest rate, and repayment tenure. You do not need to enter it manually.

Step 8: Start Date

Select the date when repayment will begin. This is typically the first day of the next payroll cycle after the loan is disbursed.

Step 9: Notes

Optionally, add any comments or notes about the purpose of the loan. This is useful for record-keeping and helps approvers understand the context.

Good examples:

• "Salary advance for January -- employee requested due to family emergency"
• "Vehicle repair costs for taxi plate TC-4521"
• "Emergency medical expenses"

Step 10: Submit

Click the "Submit" button to create the loan. The record is saved with a Pending status and enters the approval queue.

Eligibility Check

When you submit the loan form, the system automatically verifies that the borrower qualifies. The eligibility check considers:

• Active loan count -- The borrower must not have more active loans than the maximum allowed by company policy or the loan type configuration.
• Loan amount limit -- The requested amount must be within the maximum allowed for the selected loan type.
• Minimum tenure requirements -- Some loan types may require a minimum employment period before a borrower is eligible.

What Happens Next

Once submitted:

• The loan appears in the Loan List with a Pending status badge.
• An authorized approver (Admin or Finance Manager) can review the loan application.
• If approved, the loan moves to Approved status and awaits fund disbursement.
• If rejected, the rejection reason is recorded and visible on the loan record.

For details on the full approval process, see Approval Workflow.