How to Set Up Employee Loan Types | Workwisely HR Guide

Loan Types

Payroll → Loan → Loan Types

To configure loan types, follow these steps:

  • Enter the Loan Name to identify the loan type (e.g., Personal Loan, Education Loan).

  • Choose whether the payment type will be processed immediately or aligned with the salary pay cycle.

  • Specify the employee grades eligible for the loan type.

  • Indicate whether the loan amount is taxable (included) or non-taxable (excluded).

  • Define the maximum amount an employee can request under this loan type.

  • Specify the maximum repayment period(tenure)

  • Set the interest rate applicable to the loan on an annual basis, if relevant..

Fields Description

Title

Description

Loan Name

The specific title given to a particular type of loan offered by an organization(Personal Loan, Emergency Loan etc)

Payment Type

  • Immediate-The loan amount is disbursed to the employee immediately after the loan request is approved. In the payslip, it is displayed as Intermediate Payment under Earnings, and the EMI deduction will begin in the same month as the loan disbursement.

  • Salary Pay-cycle-The loan amount is disbursed as part of the regular salary pay cycle. The EMI deduction will start from the month following the loan disbursement.

Grade

Select the grade of employees (Ex: Grade A, Level 2) to whom this loan is applicable.

Tax Inclusion

Indicate whether the loan is taxable or non-taxable

Maximum Tenure

Specify the number of months or years within which the loan should be completed.

Annual Interest Rate 

Specify the annual interest rate for the loan

Do you have any disability

By enabling this option, the system can ensure that the employee is given special consideration when it comes to loan eligibility, repayment terms, interest rates, or additional support

Female

Enabling this flag restricts the loan eligibility to female employees only, ensuring that the loan is applicable exclusively to them.

Multiple Loans

Enabling this flag, allows employees to apply for and manage more than one active loan simultaneously. Employees can take multiple loans(Eg:Personal loan,Education Loan etc) at the same time.

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