Employee Loan Management That Payroll Recovers Itself
Set a policy per loan type, approve the request, and the amortisation schedule builds itself. Every payroll run deducts the instalment due, marks it paid and drops the outstanding principal, without anyone retyping a number.
- No credit card
- Quick set up
- Free onboarding
From the policy that allows it to the last instalment payroll recovers
- 6 Loan Types
- Personal, home, vehicle, education, medical, festival
- 1 Policy Each
- Rate, ceiling, tenure bounds, eligible grades
- Every Run
- EMI recovered as a Loan Repayment line
- 0% Works
- Interest-free loans amortise straight-line
A Loan Register in Excel, Retyped Into Payroll Every Month
Staff lending is one of the few things almost every Nepali organisation does and almost no HR system handles. So it lives in a spreadsheet, and the spreadsheet lives with one person.
- One workbook holds every loan, and only the accountant knows which tab is current
- Each EMI is typed into payroll by hand every month, so one wrong row is a silent underpayment
- Interest is worked out on a calculator, and nobody can show a borrower how much of an instalment was principal
- An employee resigns with three instalments left and the balance surfaces after the last payment has gone out
- Pledged collateral is a photocopy in a drawer, with no list of which loans are secured and which are not
A Policy, a Schedule, and Recovery That Runs Itself
Each loan type gets its rules once. After that the application, the schedule, the deduction and the balance are the same record, and payroll is the only thing that touches it.
What NepalHRM gives you
- A policy per loan type: interest rate, maximum amount, a ceiling as a share of gross, tenure bounds and the grades that qualify
- Approval builds the full schedule, so every instalment splits principal from interest before a rupee moves
- Payroll deducts the instalment due as a Loan Repayment line, stamps it paid and reduces the outstanding principal
- The register shows outstanding principal per employee and the deduction load the next run will carry
- The Collateral register lists secured against unsecured loans with the declared pledge value, and exports to CSV
Everything a Staff Loan Needs, From Policy to Final Instalment
The lending mechanics a bank, a cooperative or a factory already runs on paper, written down once and enforced by the system that pays the salary.
Six Loan Types, Editable
Personal, Home, Vehicle, Education, Medical Emergency and Festival Advance seed on the first visit to Loan policies. Rename them, add your own, retire what you do not lend against.
A Policy Per Type
Interest rate, maximum amount, a ceiling as a percentage of gross, minimum and maximum tenure, and the grades a policy applies to. Leave the grade list empty and it covers everyone.
Reducing-Balance EMI
Standard amortisation. Interest accrues on the outstanding balance each month, principal is the remainder, and the final instalment absorbs the rounding so the schedule retires to exactly zero.
Interest-Free Loans
Set the rate to zero and the schedule divides the principal straight-line across the term. Festival and medical advances in Nepal are usually exactly that.
Payroll Does the Recovery
Every run deducts the instalment due as a Loan Repayment line on the payslip, marks that instalment paid and drops the outstanding principal. Nobody retypes anything.
Skip One Month
Record a skipped EMI against a single payroll period with a reason and the finance user who allowed it. The loan stays active, the balance is untouched, and recovery resumes next month.
Move the First Deduction
Change the first-deduction date on an active loan and the unpaid part of the schedule re-dates with it. Instalments already recovered are left alone.
Record a Repayment
A lump sum paid outside payroll retires instalments in order, so a part payment or a full prepayment leaves the schedule honest instead of showing rows still due on a settled loan.
Collateral on the Record
Declare the pledge and its value against the loan. A policy can require collateral, and the Collateral register reports what is secured, what is not and the declared value behind it.
Finance Approves, Not Managers
A loan is approved by HR, an admin or an accountant. Reporting managers cannot approve one, and nobody can approve their own request.
Salary Advance, Separately
An advance is not a loan. It carries its own policy: a ceiling as a share of gross, a minimum service period before anyone qualifies, and a cooldown before the next one.
Registers Finance Can Use
Outstanding principal per employee, the next run's deduction load, the per-loan amortisation register and a collateral CSV, all without asking anyone to rebuild a spreadsheet.
From the Rule That Allows It to the Instalment That Closes It
Six states, and the register carries the same four statuses the app does: Pending, Active, Completed and Rejected.
- Setup
Policy set
HR defines the loan types and the caps on each: rate, maximum, share of gross, tenure and eligible grades.
- Pending
Applied
The employee picks a loan type, an amount, a tenure and the date they need it by. The policy rejects what finance would reject anyway.
- Pending
Approved
HR, an admin or an accountant approves and sets the first deduction date, which is what the schedule amortises against.
- Active
Scheduled
The amortisation schedule is generated on approval: every instalment, its principal, its interest and its due date.
- Active
Recovered
Each payroll run takes the instalment due, stamps it paid and reduces the outstanding principal on the loan.
- Completed
Closed
The last instalment retires the balance. If someone leaves early, the outstanding principal sits on the record for the exit clearance step to settle.
Lend to Your Own Staff Without Lending Out the Spreadsheet
Staff lending does not need a core banking system. It needs the rules written down once and the deduction to happen without anyone remembering to do it.
Loan Register in Excel
- The schedule is a formula somebody built and nobody audits
- Every EMI is retyped into payroll by hand, every month
- Prepayment means rebuilding the sheet, so it usually is not recorded
- Nobody can list which loans are secured without opening the file cabinet
Set the Rule Once, Recover It Every Month
Three jobs, three different people. The policy is set once, the approval happens per loan, and after that payroll carries it.
- The screen lists your loan types with how many are capped and how many are still uncapped. First visit offers to seed the six common Nepal types.
- Keep Home, Vehicle and Medical Emergency, rename Festival Advance to what your staff call it, add anything else. A type already used by a loan is disabled rather than deleted.
- Interest rate, maximum amount, maximum share of gross salary, minimum tenure and a hard ceiling on repayment tenure. Anything you leave blank reads as No cap.
- Name the grades a policy covers when a home loan is only for confirmed senior staff. An empty grade list is the org-wide default and covers everyone.
- They pick the loan type, the amount, the tenure and the date they need the money by. The policy for that type decides what the form will accept.
- Pending loans sit in the register with the requester and the amount. Approval is limited to HR, admin and accountant roles, and self-approval is blocked outright.
- The approver sets the month payroll starts deducting. That date anchors the whole schedule, which is why the employee's requested date stays advisory.
- Approving builds every instalment at once: sequence, due date, principal component, interest component and total. The loan turns Active on the same click.
- The calculator picks up every active loan for the employee and takes the earliest unpaid instalment. Nothing is entered by hand.
- The deduction lands as its own line on the payslip, alongside PF, SSF, CIT and TDS, so the employee can see exactly what was taken.
- Record a skipped EMI against that payroll period with a reason. It applies to one period only and lapses on its own, so recovery resumes next month.
- Each recovery reduces the outstanding principal on the loan and on the register. When it reaches zero the loan reads Completed.
Start With the Types
Applied Against a Policy
Recovered on the Run
One Loan Record, Four Different Questions
The borrower wants to know what is left. Finance wants to know what is owed. Payroll wants a number it does not have to calculate.
For the Borrower
Know what is left
- Apply against a named loan type with the caps already visible
- See the schedule: which instalment is next, and what of it is interest
- The payslip shows the Loan Repayment line every month it is taken
For HR & Finance
Lend by the rule, not by the mood
- One policy per loan type, so the answer is the same for everyone in a grade
- Approval limited to HR, admin and accountant, never the reporting manager
- Record a repayment, skip a period or move the first deduction date, all on the record
For Payroll
A deduction you never key in
- The instalment due is picked up on the run and stamped paid
- The next run's deduction load is visible before you start
- A regenerated payslip does not double-deduct an instalment already taken
For Audit & Compliance
Every movement has a reason
- Skipped EMIs carry a required reason and the finance user who allowed it
- The Collateral register splits secured from unsecured with the pledge value
- Outstanding principal per employee, exportable, at any point in the year
Built for the Places That Actually Lend to Their Staff
Banks, finance companies and cooperatives lend as a staff benefit and have to account for it. Manufacturers and hospitality run festival and medical advances every year. All of them do it in a spreadsheet today.
Loans Only Work Next to Payroll
A loan is a payroll instrument. It is approved against an employee record, recovered by a payroll run and surfaced again when that employee leaves.
Payroll Software
The Loan Repayment line, the advance recovery and the amortisation register all live in the same run that pays PF, SSF, CIT and TDS.
Employee Management
Grades, departments and confirmation dates come from the employee record, which is what a policy's eligibility rules read.
Onboarding & Offboarding
The exit clearance pipeline carries a step for clearing outstanding advances and loans, with the balance on the record to settle against.
Expense & Reimbursement
Money that flows the other way. Claims can be paid through the same payroll run that recovers an instalment.
Simple, Transparent Pricing
No Hidden Fees
NepalHRM gives you enterprise-grade HR software at a price built for Nepali businesses of every size.
- All core HR modules
- Nepal payroll compliance
- PF, SSF, CIT & eTDS
- Biometric integration
- Free onboarding support
- Regular feature updates
- Multi-company support
- BS + AD calendar
Free trial available, no card required · No setup fees · Cancel anytime
Run Loans in the Web App, on Any Screen
Loans, policies and the collateral register are web-app screens and work in a phone browser. The NepalHRM mobile app covers the daily things: attendance, leave, overtime and field visits.
Frequently Asked Questions
Everything you need to know about loan management in NepalHRM before you get started.
Yes. Each loan type carries its own policy, so a home loan can run at 9% and a medical emergency at 0%. A policy holds the interest rate, the maximum amount, a ceiling as a share of gross salary, minimum and maximum tenure, and the grades it applies to. Six common Nepali types are offered on first setup and you can rename or replace all of them.
Automatically. When a loan is approved the full amortisation schedule is generated, and each payroll run takes the earliest unpaid instalment, adds it to the payslip as a Loan Repayment line, marks that instalment paid and reduces the outstanding principal. Nobody types a deduction into payroll, and rerunning a payslip does not deduct the same instalment twice.
Yes, and they are common here. Set the rate to zero and the schedule divides the principal straight-line across the term, so a Rs. 1,50,000 medical advance over 12 months recovers Rs. 12,500 a month with no interest component at all. Festival advances usually work the same way.
The outstanding principal stays on the loan record and on the register, and the exit clearance pipeline carries a step for clearing outstanding advances and loans, so the settlement is done against a real number rather than a guess. NepalHRM does not net the balance off the final settlement automatically; finance settles it as part of clearance.
Yes. Record the repayment against the loan and it retires instalments in order, so a part payment or a full prepayment leaves the schedule consistent with the balance instead of showing rows still due on a settled loan. You can also skip a single period's EMI with a recorded reason, and move the first deduction date on an active loan.
Yes. A loan carries a collateral description and a declared pledge value, and a policy can require collateral before the request is accepted. The Collateral register lists every collateral-required loan split into secured and unsecured, totals the declared pledge value, and exports to CSV for the audit file.
The payslip carries the Loan Repayment amount deducted that month as its own line, next to PF, SSF, CIT and TDS. The running outstanding principal lives on the loan record and the loan register, where the employee and finance can both see which instalment is next and how much is left.
No, and NepalHRM keeps them apart. An advance is early disbursal of salary you have nearly earned, so it carries no interest and its own lighter policy: a ceiling as a percentage of gross, a minimum service period before anyone qualifies, and a cooldown before the next one. A loan is an interest-bearing instrument with a full amortisation schedule.
Stop Retyping EMIs. Let Payroll Recover Them
Join hundreds of Nepali businesses that have already moved from manual HR to NepalHRM. Your accountant has better things to do than rebuild an amortisation sheet every Shrawan.
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