> ## Documentation Index
> Fetch the complete documentation index at: https://human-resource-docs.ha-consultancy.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Loans & Advances

> Grant employee loans with auto-generated monthly repayment schedules and one-shot salary advances — skip months, reschedule, or close loans early.

Give an employee a loan with a monthly repayment plan, or grant a one-shot salary advance that's deducted from next month's pay. The system generates the repayment schedule for you, and offers handy adjustments — skip a month, push the schedule by a month, change the amount, close the loan early.

## What you can do

* Create an **employee loan** with a total amount and a monthly installment — the schedule is generated automatically.
* **Skip a month** for any reason (Ramadan, an expensive month, employee unpaid leave).
* **Move the schedule** forward or backward in one click.
* **Change the installment amount** mid-flight.
* **Close a loan early** with a single action — any residual is posted to the accounts automatically.
* Grant **advance salary** — a one-time amount deducted from the next monthly salary.

## Before you start

* Make sure your accountant has set up the HR-specific accounts on the employee posting group (see [Payroll setup → Walkthrough 7](/features/payroll-setup#walkthrough-7--wire-hr-to-your-chart-of-accounts)) — the loan and advance amounts post to those accounts.
* If your company requires loan approval, configure the workflow under [Approvals](/features/approvals).

## Walkthroughs

### Walkthrough 1 — Create a loan

An employee is approved for a 6,000 home-renovation loan, repaid over 12 monthly installments of 500.

1. Search for **Employee Loans**. The loan list opens.
2. Click **New**. A blank loan card opens with the loan number already filled in for you.
3. Fill in:
   * **Employee** — pick from the lookup.
   * **Amount** — `6000`.
   * **Installment** — `500` per month.
   * **Installment Count** — `12`. Make sure Amount = Installment × Count.
   * **Starting Installment Month** — `1` (January).
   * **Starting Installment Year** — `2027`.
   * **Effective On** — the date the employee gets the money.
   * **Notes** — optional context.
4. Press **Esc** or click **Back** to save.

The loan is now Active, and the system generates all 12 installments automatically — you don't need to enter them by hand. The **Remaining Amount** on the card starts at the full 6,000 and decreases as installments are paid.

***

### Walkthrough 2 — Check the repayment schedule

From the loan card, click **Installments** on the ribbon. The monthly rows open, each showing the month and the amount.

***

### Walkthrough 3 — Skip a month

The employee requests no deduction during Ramadan (March 2027).

1. Open the loan card.
2. On the ribbon, click **Skip Months**.
3. Click **New**. Fill in **Skip Year** `2027` and **Skip Month** `3`.
4. Press **Esc** to save.

When you run salary for March 2027, this loan is automatically skipped.

***

### Walkthrough 4 — Move the schedule by one month

Push the loan start back from January to February 2027 (e.g. employee wants a grace month before the first deduction).

1. Open the loan card.
2. On the ribbon, click **Change Installment Date**.
3. Enter the new starting month/year and confirm.

All installments shift forward together.

***

### Walkthrough 5 — Change the installment amount

The employee wants to pay 800/month for the first 6 months (to clear faster), then 200/month for the rest.

1. Open the loan card.
2. On the ribbon, click **Change Installment Amount**.
3. Enter the new amount and how many months it applies for. Confirm.

The schedule rebuilds with the new amounts.

***

### Walkthrough 6 — Close a loan early

The employee makes a one-shot payment to clear what's left.

1. Open the loan card.
2. On the ribbon, click **Close Loan**.
3. The system shows the loan number and warns that journal entries will be created for the remaining installments.
4. Click **Yes**.

The loan status changes to **Close**, a journal entry is created with the residual amount, and future salary runs ignore this loan.

***

### Walkthrough 7 — Approve an advance salary request

An employee needs an emergency cash advance to be deducted from next month's salary.

1. Search for **Advance Salary List**.
2. Click **New**. A new advance card opens with the reference already filled in.
3. Pick the employee, enter the amount, and the date.
4. If your company requires approval, the request is routed automatically. Otherwise save and the advance is recorded.

Next month's salary calculation will net the advance off the employee's pay.

## Related features

* [Payroll setup](/features/payroll-setup) — monthly salary calculation automatically nets off loan installments and advances.
* [Journals](/features/journals) — closing a loan posts a single journal line to the configured accounts.
* [Approvals](/features/approvals) — set up workflow if loans/advances need sign-off.