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Employee Loan Repayment Issue

I am facing difficulties in making the Loan Repayment work.
On the Loan doctype, after defining the Loan Amount , Repayment Schedule (Without “Repay from Salary” selected) and Creating Disbursement Entry, I see a “Create Repayment Entry Button”

On clicking the “Create Repayment Button”, system generates a Journal Entry as per the Repayment Schedule under Loan Doctype. Let us say the Payment Due was 6667 but I want to enter a Repayment entry of only 5000, I change this in the Journal Entry and Submit the Journal Entry.

Now from the Load Repayment Report under Loan Doctype, the report says that the Repayment is of 6667 (Amount Due in Repayment Schedule) but not 5000 which was actually paid via Journal Entry.

On selecting the Repay from Salary on Loan, when the Amount is recovered from Salary via Salary Slip/Payroll Entry, the amount is not reflected as Amount Paid in Loan Recovery Report.

From the documentation ,
I figured that the Accounting and Loan (HR) are not connected.
The system calculates the Paid Amount from the Repayment Schedule Table in Loan Doctype.
As a work around for my case where I want flexibility with the repayment amount, I created a Loan to be repaid over longer period of time (10 months) equally and tried to change the repayment dates which is not possible at the moment. Also while creating Repayment Entries, the system does not fetch repayment items beyond the first line in the Repayment Schedule table.

Has anyone else, found a workaround for similar use case?


You cannot change the repayment schedule, it is a read only field. Neither can you give less nor more amount that is there in the schedule, it will take exactly the same amount. The loan feature is not flexible to change the amount.

I don’t think there is a workaround for this.


Thanks for your response. I understand that things get complicated with Interest Rate. Recalculating the Repayment Schedule would be complicated if there is an interest rate defined.
I have commented on this Github Issue (in continuation to previous comment), would like to know the community’s view if this is achievable and if anyone has any other suggestions/comments

I am also facing other issue related to Repayment.

  1. I have set Repay from Salary on the Loan. On creating and submitting the Salary Slip, the repayment amount is shown and deducted from the Salary, however, it does not update the Loan doctype with Paid Amount. Am I missing anything here?

  1. Also the journal entry for Salary (if generated from payroll entry) does not consider Net Pay instead creates a JV for Gross Pay without deducting the amount deducted on account of Loan Repayment


Yeah, it seems like a bug. The paid amount should have been updated there.


Ok. I will create a Github Issue.

For the time being, I have found a workaround.

I am handling Employee Loans in the following manner

  1. Create Loan Disbursement Entry via Journal Entry. Made a separate Loan Account for each Employee under Loans and Advances (Assets)
  2. On the Salary Slip (generated via Payroll Entry to make sure there is Accrual Entry), I am deducting Loan Repayments in the Deductions table. Need to make a Loan Repayment Salary Component for each Employee and Map the Loan Account to that Salary Component (Deduction type), also need to deselect the “Is Payable” flag on Salary Component since we need to make the Loan Account under Current Assets and is not a Payable type Account
  3. On Submitting the Salary Slips via Payroll Entry, Accrual Entry makes a Credit entry of the Repaid Loan thereby reflecting the Balance Loan Amount
  4. Last step is to Make Bank Entry to reflect the actual Payment

This makes sure that an account is maintained of the Loan and Repayment Employee-wise and this information is reflected on Employee’s Salary Slip as well.


Yes, this is a workaround that you can do. Even if you didn’t make loan as a component and showed it in deductions, you can still continue with the loan repayment schedule and allow the deduction happen as per that. The effect on the accounts is still the same and working, only the paid amount is not getting captured in the report.


Still the same…employee balance does not update. Repayment is still the total loan.

@Manan_Shah i guess you are using version 12?

On my version 13, I created loan and even disbursed it but after running payroll entry it didn’t show on my payslip.