Purpose
The Loan Settings section in HRStop allows administrators to define the eligibility and processing rules that govern how loans are requested, approved, and recovered through payroll.
These settings ensure that employee loan requests follow company-defined conditions—such as minimum tenure, maximum amount limits, documentation rules, and repayment behavior—before being processed through payroll.
Who Should Use
This configuration should be managed only by Administrators with authorized access to: Control Panel → Settings.
When to Use
You may need to review or update the Loan Settings when:
- The organization introduces or modifies its employee loan policy.
- You want to control which employees are eligible to apply for loans.
- The finance or HR team changes repayment rules or documentation requirements.
- You need to align internal rules with regulatory or compliance updates (e.g., SBI interest rate).
Step-by-Step Configuration
- Log in as an Administrator with access to the Settings module.
- Navigate to Control Panel → Settings → Payroll.
- Scroll down to the Loan section.
- Click Configure Loan Settings.
- A configuration popup will open displaying all loan-related settings available for your organization.
In the popup, you can configure the following options as per your company’s loan policy.
Eligibility Rules
These settings determine who can apply for a loan and under what conditions.
1. Require Minimum Tenure in the Organization to Apply for a Loan
Define the minimum period an employee must complete in the current organization to become eligible to apply for a loan.
- Enter the duration in years, months, and days.
- Example: 1 year, 0 months, 15 days means employees must complete at least one year and 15 days in the company before applying.
Note: Only the employee’s current company tenure is considered. Prior experience from previous employers is not counted.
2. Maximum Loan an Employee Can Apply For (Times of Monthly CTC)
Specify the maximum loan amount that can be applied for, expressed as a multiple of the employee’s monthly CTC.
- Example: If you set this value as 3, and an employee’s monthly CTC is ₹60,000, they can apply for a maximum loan of ₹1,80,000.
3. Employee Must Have No Outstanding Loan
When enabled, this rule prevents employees who already have an active or unpaid loan from applying for a new one.
This ensures that only one loan request can exist at a time per employee.
4. Time Gap Before Next Loan Request (in Months)
Define the minimum gap (in months) that must elapse between the full repayment of a previous loan and a new loan application.
- Example: Setting 6 means the employee must wait six months after the previous loan is fully repaid before submitting a new request.
Processing Rules
These settings determine how loans are processed, repaid, and recorded through payroll.
5. Document Upload Required with Loan Application (Optional / Mandatory)
Specify whether a supporting document must be uploaded when an employee applies for a loan.
- Optional: Employees can apply without attaching a document.
- Mandatory: The system will require a document (e.g., signed application form or approval proof) before submission.
6. Deduct Loan EMI from Next Month
Determine when EMI deductions begin after a loan is marked Disbursed.
- Unchecked: EMI will start from the same month’s payroll.
- Checked: EMI will begin from the next month’s payroll processing.
Example: A loan disbursed in April with this setting enabled will start EMI deductions from May payroll.
7. Interest Rate per Annum by SBI
Enter the current interest rate as per the State Bank of India (SBI).
This reference rate is used for calculating taxable interest benefits (Loan Perquisites) when the organization provides loans at a lower or zero interest rate compared to SBI’s standard rate.
Note: The updated configuration will take effect immediately for all future loan requests and payroll cycles.
Pro Tips
- Review and update Loan Settings whenever your internal HR or finance policies change.
- Keep the SBI interest rate current for accurate perquisite computations.
- Use the Minimum Tenure and Outstanding Loan rules together to prevent premature or duplicate loan requests.
- Test your configuration using a sample employee before rolling out the settings organization-wide.
- If the Loan option is not visible to employees, ensure Enable Loan Module Visibility for Employees is turned on in the parent Payroll settings page.
Related Articles
- Adding a Loan on Behalf of an Employee – Learn how administrators can add loans manually for employees.
- Loan Approval Workflow – Understand how approvals move between manager and administrator levels.
- Recording Loan Repayments (EMI Transactions) – Learn how EMI deductions are processed and tracked.
- Applying for a Loan as an Employee – See how employees submit loan requests through the self-service portal.