About Employee Loans

Create and Manage Loans

Explore how you can:

• Create a Loan

  .

• Skip Loan EMIs

  .

• Modify Loan Duration

  .

• Record External Loan Recovery

  .

• View Loan Reports

  .

Create a Loan

To create a loan as per your loan policy:

1. Log in to the

   XPayroll Dashboard

   .
2. Navigate to ADMIN OPTIONS → Pay Employees → Loans in the left menu.
3. Click + ADD NEW LOAN.
   
4. On the Create Loan page:
   1. Enter employee details.
      1. Search and enter the employee's name.
      2. Provide a loan name. For example, 'Personal Loan'.
   2. Specify the loan amount and duration details.

      1. Enter the total loan amount sanctioned to the employee.

      2. Choose the interest type between Flat rate or Reducing rate.

         Difference between Flat rate and Reducing rate

         Flat Interest Rate	Reducing Interest Rate
         Is a fixed interest rate charged on the total principal availed by the employee.	Also a fixed interest rate, but is charged on the total outstanding principal amount after each EMI/repayment.
         Interest amount remains fixed throughout the loan tenure.	Interest amount changes after every EMI as the principal amount is reducing.
         Interest is easier to calculate and consistent.	Interest amount calculation is more complex than flat rate calculations.
         Interest increases the EMI amount.	Interest is charged proportionately on the outstanding amount.

      3. Enter the rate of interest. You must use SBI's loan products for reference.

      4. Provide the perquisite percentage.

         What is Perquisite Rate?

         Perquisite rate or perquisite % is the difference between SBI's interest rate on loans and the organisation's interest rate.

         • To calculate perquisite rate, you must refer to SBI's loan products.
         • If your organisation provides personal loans, check SBI's personal loan products. Similarly, you can check SBI's marriage loan products for marriage loans.

         Suppose SBI's personal loan interest rate is 13% and your organisation's rate of interest is 8%.

         Perquisite %	13% - 8% = 5%

         The 5% is a perquisite income to the employee and is charged under the selected tax regime, basis their tax bracket.

   3. Determine the repayment terms.
      • Provide the duration of the loan by entering the number of months.
      • Choose from when the EMI deduction starts to provide flexibility to the employee.
5. Review the details and click ADD TO PENDING LOANS.

You have successfully created a loan. This moves to the pending status as you must disburse the loan for the employee to receive the loan amount.

To disburse the loan to the employee:

1. Go to PENDING LOANS on the Loans page.

2. Review the loan details. You can delete a loan entry if it is no longer required for the employee.

3. Click DISBURSE LOAN (). This creates the loan payout to your employees.

   

   Add funds to your XPayroll account

   in case the DISBURSE LOAN () option is not available.

Once you disburse the loan, you can view the details and summary on the

Manage Loans

To manage a particular loan:

1. Log in to the

   XPayroll Dashboard

   .
2. Navigate to ADMIN OPTIONS → Pay Employees → Loans.
   
3. Click Manage against the particular loan.

You can filter active and closed loans using the drop-down list on this page. A loan is closed after the loan amount and interest is

Skip Loan EMIs

Sometimes an employee may request to skip a month's EMI. To skip the upcoming month's EMI:

1. Navigate to the

   Loan Details

   page.
2. Click Skip EMI in right pane.
3. Choose how to adjust the EMI repayment. You can either increase the EMI amount proportionally for the loan tenure or the total number of EMIs payable. You can preview the updated calculation in the table displayed below.
   
4. Click CONFIRM.

You have successfully skipped a month's EMI for the employee.

Modify Duration

To modify the loan duration:

1. Navigate to the

   Loan Details

   page.
2. Click Modify Instalment Terms in the right pane.
3. Enter the new loan duration in months on the Modify Loan Duration page. Click PREVIEW NEW TENURE to check the change in the EMI and outstanding balance amount.
4. Click CONFIRM.

You have successfully changed the EMI tenure for the loan.

Recover Loan

In some cases, employees may be interested in foreclosing the loan. In such cases, you can recover the loan amount externally and update the recovery on XPayroll. To enable foreclosure for your employees:

1. Navigate to the

   Loan Details

   page.
2. Click Loan Recovery in the right pane.
3. Choose between a Full or Partial Recovery of the loan. In case of a partial recovery, enter the amount you have recovered.
   
4. Click Next.
5. Review the updated loan tenure, EMI amount and the repayment status for the payroll months in the Verify & Confirm page and click Confirm.
6. In the Confirm changes pop-up modal, click CONFIRM CHANGES.

You have successfully updated the loan status after recovery.

View Reports

To view the loan reports:

1. Navigate to the

   Loan Details

   page. Here you can view the loan details and terms.
2. Click Report in the right pane. This opens the Loan Summary report.
3. You can use the filter options and click APPLY FILTER to view the data.

For Employees

Once the employee receives the loan amount:

• XPayroll deducts the EMI from their salary every month. Employees can view the deduction breakdown on their payslips.
• Employees can view their loan infomation from their

  profile

  .

Related Information

• About Salary

• Run Payroll