Approve loan applications
Approve or reject staff loan applications in two steps, HR first and then management (the MD), and lower the amount if needed.
Before you start
- Set up loansHR sets up the loan types, the MD email alert and who is allowed to approve at each step.
In this article
Every loan application goes through two approval steps:
- Step 1 (HR): HR checks the application and approves it, optionally at a lower amount, or rejects it.
- Step 2 (Management): the Managing Director, or whoever has this step, gives the final approval or rejects it.
After step 2 the employee gets an offer to accept. Line managers aren't part of loan approval.
Step 1: approve as HR
Open HR › Loan › Approvals (step 1)
In the menu on the left, select HR, then Loan, then Approvals (step 1). The number next to it is how many applications are waiting. The page is called Loan Approvals — Step 1 (HR).
- Approvals (step 1), with the number waiting.
- Pending Approvals, Total Requested and Avg Loan Amount for the applications waiting.
- Search by employee, loan number or purpose, and filter by loan type.
- View opens the full application, with its documents and history.
- Approve.
- Reject.
Each row shows the Loan #, Employee, loan Type, Amount, Tenure (months), Monthly instalment, Purpose and the date it was Applied. The buttons at the top right switch between a table and cards.
Check the application
Select View to see everything about the application: the purpose, the supporting documents the employee attached, and the approval history. See Manage loan applications.
The employee's eligibility (time at the company, open loans) was checked when they applied, so you only need to judge the request itself.
Approve, at the full or a lower amount
Select Approve. The Approve Loan Application window shows the employee, amount and loan type.
- Approved Amount: starts at the amount asked for. You can lower it, but not raise it. The monthly instalment is worked out again from this amount.
- Comments (optional): a note for the next approver and the employee.
- Approve.
You'll see Loan approved successfully. The application moves to step 2, and the addresses in MD notification routing get an email.
Or reject it
Select Reject, type the reason in Comments, and select Reject. A reason is required: the employee sees it. You'll see Loan rejected, and the employee's application shows Rejected.
Step 2: final approval by the MD
Open Approvals (step 2)
Select HR › Loan › Approvals (step 2) (with the MD role: Loan Approvals). The page is called Loan Approvals — Step 2 (Management) and lists applications HR has approved.
- Approvals (step 2).
- Awaiting MD Approval, Total Requested and Avg Loan Amount.
- The list. When nothing is waiting you see No pending MD approvals found.
Approve or reject
Use Approve or Reject on the row, the same way as in step 1. The Approved Amount starts at the amount HR approved; you can lower it again.
When you approve, the loan becomes an offer: the employee sees Awaiting offer response and can open the offer letter. See Accept a loan offer.
What happens next
| The loan shows | Means | Next |
|---|---|---|
| Pending HR approval | Waiting for step 1 | HR approves or rejects |
| Pending MD approval | HR approved | The MD approves or rejects |
| Awaiting offer response | The MD approved | The employee accepts or rejects the offer |
| Offer accepted | The employee accepted | Disburse the loan |
| Rejected | HR or the MD rejected it | Nothing. The employee can apply again |
If something goes wrong
| Message | What to do |
|---|---|
| Enter a valid approved amount | Enter an amount above 0. |
| Approved amount can't exceed the requested … | Enter the requested amount or less. |
| Give a reason for the rejection — the employee will see it | Type the reason in Comments. |
| This loan is not waiting for this approval (current status: …) | Someone else has already acted on it. Select Refresh. |
| No pending HR approvals found. | Nothing is waiting for step 1. |