Daily Loan Management Process (For Daily Wages Employees)
The Daily Loan module is specially designed to cater to employees working on a daily wage basis, ensuring loans are managed fairly and repayments are based on daily attendance. This approach helps both employees and payroll departments maintain financial transparency and discipline.
Selecting Employee and Loan Details
To begin, select the employee from the list of daily wage employees. Only employees categorized under Daily Wages should be selected to ensure the deductions are properly managed on a daily basis.
Verify the employee’s wage type and ensure there are no active restrictions or issues before proceeding.
Next, choose the Loan Date, which represents the day the loan amount will be credited to the employee. Immediately after selecting the loan date, enter the Loan Amount that the employee needs.
While creating a new loan, it is important to check if the employee has any existing unpaid loans.
If the employee has an active (unpaid) loan, the system will prompt a warning or notification to avoid overlapping repayments.
In such cases, either clear the existing loan (if nearing completion) or carefully plan the new loan so it does not burden the employee.
Choosing the EMI Start Date and Setting Repayment Plan
After entering the loan details, select the EMI Start Date.
It is important that the EMI Start Date is the day after the Loan Date, so that repayment deductions start smoothly from the next working day.
The system provides three repayment methods designed specifically for daily wages:
- Fixed Amount:
A small, constant amount is deducted from the employee’s daily earnings until the full loan is repaid. - Fixed Terms:
The loan amount is divided equally across a set number of working days — ensuring that each day’s deduction is consistent. - Customize EMI terms & amounts:
Allows flexibility where different daily deduction amounts can be set based on the employee’s earning pattern or company policy.
The choice of EMI structure should balance the employee’s daily income and the urgency of loan recovery.
Tracking Loan Repayment and Closing Paid Loans
Once deductions begin, the system automatically tracks each daily deduction based on the employee’s actual attendance.
If the employee is absent, no deduction occurs on that day, and the repayment period automatically extends.
As the employee makes payments through daily deductions, the outstanding balance is updated live in the system.
When the total loan amount is fully repaid, the loan status changes to Paid Loan automatically, and no further deductions will be made from the employee’s wages.
In case of any early repayments (e.g., if an employee requests to pay off the balance sooner), manual closure of the loan can also be processed by HR or payroll teams, ensuring the employee’s records remain clean and up-to-date.
Important Conditions for Daily Loan
- Only Daily Wages Employees are eligible.
- EMI deductions are tied strictly to actual working days.
- No deduction happens on days when the employee is absent.
- New loans can only be assigned after checking the current loan repayment status.
- Paid loans automatically close in the system, ensuring no over-deductions.
Conclusion
The Daily Loan Management Process ensures that daily wage employees can access financial support while maintaining structured and fair repayment methods.
By integrating new loan creation, flexible repayment options, and automatic tracking of paid loans, the system simplifies loan management and protects both employee welfare and organizational finances.
Following this structured approach guarantees transparent, hassle-free financial operations that align with daily wage earning patterns.