TABLE OF CONTENTS

• Introduction
• Adding a new loan
• Editing and Canceling the loan
• Approving or Rejecting loan requests
• Managing Loan recovery - Skipping EMIs and pre-closing loans
  • Override Loan
  • Change Term

Introduction

After you've created loan policies and assigned them to the relevant employees, the employees can make requests for loans. Global Admins or Payroll admins in the system can also create new loans on behalf of the employees. This article will cover how you can assign new loans, manage loan repayments and more. 

Adding a new loan

Employees can apply for a loan as per the policy from the Loans section in the My Finance tab on their profile. Alternatively, as an admin, you can also add a loan and assign it to an employee. You can also import loans in bulk. Let's see how you can do these actions on the Keka HR portal.

To add a new loan for an employee in your organization, navigate to Payroll (1) and select the Loans (2) tab. Ensure that you're on the Loans (3) sub-tab and Outstanding Loans (4) section. 

This screen shows the information on all the outstanding loans that are currently active. From this window, you can add a new loan by clicking on the +Add New Loan button.

On the Add New Loan window, search for the employee you want to add the new loan for. 

Once the employee has been selected, you will see various options that will help you configure the loan as you wish. 

Loan Category would depend on the loan policy that has been assigned to the employee and the various loan categories that have been added to this policy. 

Enter a Loan Amount and the Interest Rate that needs to be charged for this loan. You can also choose whether interest is calculated at a Flat Rate or a Reducing Rate. A flat rate charges the same interest rate across the period of the loan. A reducing rate calculates the interest based on the outstanding loan amount. Choose the option you want from the drop-down.

You can choose the month from which the EMI deduction starts from the EMI Deducts From drop-down. Next, enter the Repayment Term which indicates the number of EMIs. 

Disbursal Mode indicates whether the loan amount should be credited as a part of Keka Payroll or if it needs to be processed separately and paid outside of payroll. If you choose Keka Payroll, the loan amount will be added to the bank statement when the salary is processed at the end of the pay cycle. If you choose Outside Payroll, a separate bank statement will be generated for the loan amount. 

Finally, you can select the Loan Release Date. 

Based on the selections you've made, you can see the total loan amount that is to be repaid including the interest that applies. You can also see the EMI based on the selections you've made. Also, add a note that should be added to the loan application. 

Click on View Details to see more details of the loan including the interest amount, EMI interest, and pre-EMI interest. Pre-EMi interest specifies the simple interest that is charged on the loan for the period between the loan disbursal and the time from when the EMI on the loan starts.

Once you've entered the required details, click Save to add the new loan. 

You can also import loans in bulk. To do this, on the Outstanding Loans tab, click on the arrow next to the Add New Loan button and select Import New Loans from the drop-down. 

You will be taken to the Upload Employee Loan Information screen. Here select the Pay Group you want from the drop-down if you have more than one configured. Click on Download the Excel Template. This will download an excel template with the Employee Number and Employee Name of all the employees in the pay group. You can use this template to import loans in bulk. 

In the downloaded excel file, enter the loan details to be imported. Remove the details of all the other employees and keep the details of only those employees for whom you are adding loan details. 

Add the relevant details on the excel file including the Loan Amount, Loan Category, Rate of Interest, Repayment Term, Interest Calculation Method, Disbursal Mode, and Loan Released On. 

Save the file after you've entered the relevant details. On the Upload Employee Loan Information window, click on Upload Excel File to upload the file to the system. In the next section, ensure that the columns on the file match with the fields on Keka. 

Click Continue to preview the data. Here you can verify the accuracy of the information once again and ensure that there are no errors in the file. If there are errors, make the necessary changes in the excel file and re-upload the file. Click Continue when you have fixed all the errors. 

This will add the loan details you have added to the excel file in the system. 

Editing and Canceling the loan

You can view and edit the various details of the loans that are currently active from the Outstanding Loans page. You can also cancel the loans that are outstanding if the disbursal of the loan amount has not happened. 

To edit the loan details, click on Edit under the Actions column for the loan information you want to edit. 

On the Edit Loan window that opens, you can make changes to the loan as you wish. After you've made the changes, click Update to save the changes.

You can cancel a loan that is yet to be disbursed from the same page. Click on the three dots corresponding to the loan you want to cancel under the Actions column. From the drop-down, select Cancel.

Click Confirm in the confirmation window to cancel the loan. 

Approving or Rejecting loan requests

You can approve or reject the loan requests that your employees have made on the Loan Requests tab. To view the loan requests and approve or reject these requests, navigate to Payroll (1) from the left pane and select the Loans (2) tab. On the Loans (3) sub-tab, select the Loan Requests (4) tab.

Here, you'll see the various loan requests from the employees. You can approve or reject these by clicking Approve or Reject as required.

When you click on Approve, the Approve Loan window opens up where you can make changes to the loan amount, the interest rate, how the interest is calculated and when the EMI deduction starts. You can also select the Disbursal mode as well as the repayment terms and the loan release date.

You can view the particulars of the loan including the total loan amount to be repaid and the EMI as well based on the selections you've made. Also, add a note to add your comments regarding your approval. 

Make the necessary selections and then click Approve. 

When you click on Reject, the Reject Loan Request window is shown where you have to enter a reason for rejecting the loan. Click Reject.

Managing Loan recovery - Skipping EMIs and pre-closing loans

You can also manage the loan recovery for loans that are currently active. You can skip EMIs based on special situations, you can pre-close the loans and more. Let us look at how these actions can be performed on Keka. 

You can view the status of outstanding loans in the organizations via the employee profile or the Loans page. 

Search for the employee via the search bar at the top of the portal. 

Open the employee profile, and select the Finances tab. Go to the Loans sub-tab to see the various loans that are active for the employee. Select the Loan Disbursed section to see the various loans that are active as well as the cleared loans. 

Select the loan that you want to see the recovery details for and go to the Loan Recovery Details section. Here you will see the schedule of EMIs. 

You can also see the schedule of EMIs via the Loans page. To see these details, navigate to Payroll (1) and select the Loans (2) tab. Ensure that you're on the Loans (3) sub-tab and Outstanding Loans (4) section. 

Here, you can see the various loans that have been approved. The status column will tell you if the loan has Not Started yet or if it is In Progress. You will be able to edit the particulars of a loan that has not started. For loans that are in progress and EMIs are being paid, click on View under the Actions column to see the Loan Details as well as the Loan Recovery details. 

In the Loan Details window, you can see the various particulars of the loan in the Loan Details section. You can also see the EMI schedule and the breakup including the principal amount, interest and the amount left in the loan after the EMI. 

To Change the terms of the loan including skipping an EMI, pre-closing the loan or changing the term, use the ribbon on this page with the upcoming EMI details and click on the Click Here link.

You can select what you want to do with the remaining portion of the loan from the Change Term or Override Loan for Upcoming Payment window. 

Override Loan

Selecting the Override Loan option will give you the option to Skip EMI or Pre-pay Balance.

If you choose Skip EMI, you can then select between dividing the skipped EMI amount between the remaining EMIs which will increase the overall EMI amount. Select Increase EMI Amount for this.  If you choose Extend Number of EMIs, the employee can pay the same EMI but the term of the loan increases by 1 month. 

You can also choose to Pre-pay Balance. Here, you will get additional options where you can choose to Pre-pay Complete Balance or Pre-pay Partial Balance. If you choose to Pre-pay Partial Balance, you can enter the Amount Being Pre-paid. You also get to choose how the remaining EMI is being recovered. You can Adjust the EMI Amount or Adjust the Number of EMIs. 

Another option you have in case of partial pre-payment is whether you want to recover the EMI over and above the partial pre-payment or if you want to skip the upcoming EMI. 

In case you are preclosing the loan or doing a partial pre-payment, you can also choose the Repayment Mode. You can select between Salary Deduction, Bank Transfer or Cheque as the repayment mode. Choose the appropriate option from the drop-down. 

Change Term

You can also choose the Change Term option which allows you to increase or decrease the number of EMIs that should be recovered to close the loan. Select the Change Term option and then enter the number of months you want in the New Outstanding Term (Months) field.

This will recalculate the EMI amount that is being recovered every month and the new EMI will be displayed on this window. 

Make the appropriate selections from the options on this window. Add a note for the records to signify why this change was made in the Comments section. Click Save to update the changes in the system.  

That's all that there is to know about managing loan approvals, repayments and EMIs. More questions regarding managing loans in your organization? Talk to our product experts today!