Type of Loan Application for a Loan Chart of Accounts
2. How to make a record of a loan
-
- Click on Loan and then New.
-
- Pick the name of the applicant.
-
- Choose the loan application. After you choose a loan, information such the loan type, amount, interest rate, repayment method, repayment period in months, and monthly repayment amount will be retrieved.
-
- Type in the date you want to start paying back. Loan
-
- Enter your account information, like your payment method, payment account, loan account, and interest income account.
-
- Store.
-
- A Repayment Schedule is automatically made when you save it.
-
- The “Repayment Start Date” would be used to set the date of the initial payment.
-
- The Schedule for Paying Back
-
- If the loan payment will come out of your pay cheque, tick “Repay from Salary.”
-
- You can also make a Loan record right from the Loan Application.
3. Characteristics
3.1 Making a Disbursement Entry
- If the status of the Loan document is “Sanctioned,” you can click on “Create Disbursement Entry” to make a Journal Entry of the Loan.
- Entry for Disbursement
3.2 Deduction from Salary for Loan Repayment
To automatically take the loan payment out of your pay cheque, check “Repay from Salary” in Loan. It will show up on your salary slip as Loan Repayment.
3.3 Extending the Loan
The salary is less the amount of the loan. If the employee is on unpaid leave for a while, the loan can be extended without having to take out a new one. Even after you submit the loan, you can change the Repayment Schedule table to do this.
