Weekly Loan Management Process (For Weekly Wages Employees)
The Weekly Loan module is designed for employees who are paid on a weekly wage basis, ensuring that loans are disbursed and repaid in a structured, manageable manner according to weekly payroll cycles.
This setup promotes both financial support for employees and seamless accounting for the organization.
Selecting Employee and Loan Details
To initiate a Weekly Loan, start by selecting the employee from the list of weekly wage employees.
Ensure that only employees categorized under Weekly Wages are selected to maintain accurate loan tracking and deductions.
Verify the employee’s active status and wage category before proceeding.
Once the employee is selected, choose the Loan Date, which represents the date when the loan amount will be credited to the employee.
Immediately after selecting the loan date, enter the Loan Amount that the employee requires.
While processing a new loan, the system will automatically check for any existing unpaid loans associated with the employee.
If an active loan exists, assess whether to proceed with a new loan, or ensure that previous obligations are cleared or adjusted to avoid confusion.
Choosing the EMI Start Date and Setting Repayment Plan
After entering the loan details, select the EMI Start Date.
For weekly employees, the EMI Start Date must be one week after the Loan Date or the start of the next payroll week, ensuring that deductions align perfectly with weekly salary payments.
The system offers flexible EMI repayment options:
- Fixed Weekly Amount:
A consistent amount deducted every week from the employee’s wages until the loan is fully repaid. - Fixed Number of Weeks (Terms):
The loan amount is divided equally across a specific number of weeks, ensuring uniform deductions.
This structure ensures that repayments do not burden the employee beyond their normal weekly earning capacity.
Tracking Loan Repayment and Closing Paid Loans
As repayments begin, the system will automatically deduct the EMI amount from the employee’s weekly salary.
Each deduction updates the outstanding balance in real-time, allowing both employees and managers to monitor repayment status.
When the full loan amount has been recovered, the loan status will be marked as a Paid Loan automatically by the system.
This automatic closure prevents any additional deductions beyond the necessary loan recovery.
If an employee opts for early settlement, the HR or payroll team can manually close the loan by collecting the final balance amount.
Important Conditions for Weekly Loan
- Only Weekly Wages Employees are eligible.
- EMI deductions are aligned to weekly payment cycles.
- New loans must be assigned carefully after reviewing existing loan status.
- Paid loans are closed automatically once fully repaid, ensuring no manual follow-ups.
Conclusion
The Weekly Loan Management Process ensures that weekly wage employees can access financial assistance when needed, while also supporting structured and stress-free repayments through weekly deductions.
By offering flexible repayment models and built-in tracking of new and paid loans, the process brings transparency, efficiency, and employee satisfaction.
Strict adherence to the weekly payroll structure guarantees smooth loan operations without disrupting regular wage calculations.