When an employee takes a loan, they choose a repayment tenure based on their repayment capacity. The employee is obligated to repay the loan within that specified time period as per the loan terms. However, circumstances such as a promotion, new job, or incentives can increase the employee's capacity to repay the loan. This can lead to the employee repaying the loan before the maturity of the loan tenure, which is known as a foreclosure of the loan.
To foreclose a loan that is currently in progress, navigate to Payroll (1) and then go to Loans (2).
Go to the Loans (3) tab and select Outstanding Loans (4).
From the list of loans that are in progress, locate the employee for whom you want the loan to be foreclosed.
Click View in the Actions column.
From the Loan Details window, select Click Here in the ribbon. This will open up the Change Term or Override Loan for Upcoming Payment window.
In this window, select Prepay Balance for the question What do you want to do with this loan EMI?.
Select Prepay complete balance (Foreclosure) and also select a Repayment Mode (Salary Deduction, Bank Transfer, or Cheque).
Once you enter the necessary details, select Save.
This will foreclose the loan that the employee has availed using the selected repayment method.
More questions regarding loans and foreclosure? Check out this article on how to skip an EMI or get in touch with us!
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