Hi Bhaskar, In scenarios where we want to keep the first loan open, how should the *principal balance* and *interest calculations* be handled? I believe Nazeer raised a similar concern.
For example, consider a loan disbursed for *$10,000* with an *EMI of $100*. If the intent is to move the *last few installments into a new loan*, we would typically have to do one of the following: - *Close the first loan* and create a new loan with the outstanding balance, or - *Write off the remaining balance* of the first loan and create a second loan with the current balance amount, or - *Recalculate the first loan* with a reduced disbursement amount and revised interest; however, this would again trigger interest recalculations and introduce additional complexity. Could you please share a *spreadsheet example* illustrating how *both loans would look after creating the second loan*, including principal and interest breakdowns? >From a Fineract perspective, this approach is clearly *not supported*, but I’m curious to understand the *expected functional behavior* and how both loans are intended to coexist and operate. Regards, Bharath Lead Implementation Analyst | Mifos Initiative PMC Member | Apache Fineract Mobile: +91.7019635592 http://mifos.org <http://facebook.com/mifos> <http://www.twitter.com/mifos> On Mon, Jan 5, 2026 at 7:15 PM Paul <[email protected]> wrote: > An approach may be found by sticking to basic double entry accounting and > regulatory advice. Regardless, SHOULD be handled is a custom solution. > > Custom Implementation > > Until Fineract can provide a fully audited, configuration-based framework > for related scenario, this feature should remain a *user/custom solution*. > Transitioning a manual process into a core function prematurely introduces > 4 critical vulnerabilities: > > 1. > > *Regulatory Divergence:* Since loan restructuring laws vary by > jurisdiction, a "one-size-fits-all" manual tool often* fails to > capture localized requirements* for Truth in Lending disclosures or > interest re-calculation methods. > 2. > > *The manual process* is prone to input error and needless risks. > 3. > > *Audit Trail Breakage / Fragmentation:* Manual "workarounds"—such as > deleting installments—often bypass the double-entry integrity required for > *institutional > auditing.* > 4. > > *Asset-Liability Mismatch:* As noted in the developer response, > removing installments creates a discrepancy between the original *Disbursed > Amount* and the sum of the *Repayment Principal Portions*. > > Developer's Technical Query > > The developer's (Nazeer) concern regarding the mismatch of the disbursed > amount is valid. In standard accounting: > > 1. > > *Integrity:* The $Total Principal Repayments$ must always equal the > $Original > Disbursed Amount$. > 2. > > *The Solution:* Rather than "removing" installments or reducing the > disbursed amount, a recast should be handled as a *Loan Schedule > Rescheduling* or a *Refinance transaction assuming Fineract is capable > of perfection in these areas, including audit and regulatory proof*. > - > > The original loan is closed via a "Restructure" event. > - > > A new schedule is generated where the $Remaining Principal Balance$ > of the old loan becomes the $Opening Balance$ of the new schedule. > - > > This maintains the historical audit trail of the original > disbursement while ensuring the new repayment installments align with > the > current debt. > > Recommended Strategy > > *Possible Phase Approach:* > > > - *Current Custom/Plugin Solution: *Limits risk to specific users; > prevents platform-wide compliance failures. > - *Future Configurable Core Framework:* Uses "Core Machine" logic to > ensure every manual change triggers a corresponding audit log and updated > disclosure statement. > > > When supporting a highly regulated banking or lending core, the key > decision between core and custom, is "Do no harm" :) > > Hope this is helpful to ferret both supportable method and core vs custom > path. > > *Core Banking / Lending Business Consultant* > Paul Christison > > On Sun, Jan 4, 2026 at 11:36 PM Nazeer Hussain Shaik < > [email protected]> wrote: > >> Yes you will create the new loan with that amount (total non due >> instalments) - I understood this part. >> Once you remove the instalments on existing loan, the disbursed amount >> won't match with repayments principal portions right? It's not correct to >> reduce the disbursed amount value right. My question is related to this. >> >> Thanks, >> Nazeer >> >> On Mon, Jan 5, 2026 at 12:24 AM Bhaskar Tiwari <[email protected]> >> wrote: >> >>> >>> What happens to the principal portion , Charges (If any) of instalments >>> you intended to remove? >>> *Answer:* Using non-due principal I want to create a new loan. >>> Also non-due installments does not have any changes accrued. >>> >>> ------------------------------ >>> *From:* Nazeer Hussain Shaik <[email protected]> >>> *Sent:* Monday, January 5, 2026 10:24 AM >>> *To:* [email protected] <[email protected]> >>> *Cc:* [email protected] <[email protected]> >>> *Subject:* Re: Query: Splitting an Existing Loan and Creating a New >>> Loan for Remaining Installments >>> >>> It is not possible to remove the instalments (Due / Non due) once the >>> loan is active. >>> >>> My question to you: >>> - What happens to the principal portion , Charges (If any) of >>> instalments you intended to remove? >>> >>> >>> Thanks, >>> Nazeer >>> >>> On Sun, Jan 4, 2026 at 11:33 PM Bhaskar Tiwari <[email protected]> >>> wrote: >>> >>> Hi Bharath, >>> Thank you for your response—this is helpful. >>> However, I have one key scenario I would like to clarify. I want to keep >>> the existing loan active with only the installments that are already due >>> (or up to a certain point) and remove the not-yet-due future installments. >>> Based on those removed future installments, I would then like to create a >>> new loan. >>> Could you please advise if there is a supported way in Fineract to >>> achieve this behavior? >>> >>> >>> >>> ------------------------------ >>> *From:* Bharath Gowda <[email protected]> >>> *Sent:* Sunday, January 4, 2026 12:04 PM >>> *To:* [email protected] <[email protected]> >>> *Subject:* Re: Query: Splitting an Existing Loan and Creating a New >>> Loan for Remaining Installments >>> >>> Hi Bhaskar, >>> >>> You can explore the following options to see if it meet your >>> requirements. >>> >>> 1. To use the Top-up loan feature in Fineract >>> A top-up loan allows you to create another loan from the existing loan. >>> You can refer to this >>> <https://docs.mifos.org/mifosx/user-manual/for-administrators-mifos-x-platform/administration/products/loan-products/loan-product-fields/configuring-and-disbursing-of-top-up-loan> >>> document >>> for more information >>> >>> 2. Write off and re-create a loan >>> This can be an effective workaround where you can write--off the loan as >>> of the 8th installment date and create a new loan with just 4 installments >>> and the previous principal balance. >>> The only thing you need to verify is the accounting entries if you are >>> using Fineract accounting. >>> You can refer to this >>> <https://docs.mifos.org/mifosx/user-manual/for-operational-users-mifos-x-web-app/accounts-and-transactions/loan-accounts/how-to-write-off-a-loan-account#to-write-off-a-loan-account> >>> document >>> for more information >>> >>> >>> >>> Let me know if you have any questions >>> >>> >>> >>> Regards, >>> Bharath >>> Lead Implementation Analyst | Mifos Initiative >>> PMC Member | Apache Fineract >>> Mobile: +91.7019635592 >>> http://mifos.org * <http://facebook.com/mifos>* * >>> <http://www.twitter.com/mifos>* >>> >>> >>> On Fri, Jan 2, 2026 at 9:32 AM Bhaskar Tiwari <[email protected]> >>> wrote: >>> >>> Hello Fineract Community, >>> I am currently using the Apache Fineract application and have a question >>> regarding loan restructuring. >>> I have created a monthly installment loan with a total of 15 >>> installments. The repayment schedule is as follows: >>> >>> - Installments 1 - 4: Fully paid >>> - Installments 5 – 8: Due and not yet paid >>> - Installments 9 – 12: Not yet due >>> >>> For reference, the original loan schedule looks like this: >>> Installment No. >>> Due Date >>> Paid status >>> 1 >>> 31-May-25 >>> Paid >>> 2 >>> 30-Jun-25 >>> Paid >>> 3 >>> 31-Jul-25 >>> Paid >>> 4 >>> 31-Aug-25 >>> Paid >>> 5 >>> 30-Sep-25 >>> Due >>> 6 >>> 31-Oct-25 >>> Due >>> 7 >>> 30-Nov-25 >>> Due >>> 8 >>> 31-Dec-25 >>> Due >>> 9 >>> 31-Jan-26 >>> Not yet due >>> 10 >>> 28-Feb-26 >>> Not yet due >>> 11 >>> 31-Mar-26 >>> Not yet due >>> 12 >>> 30-Apr-26 >>> Not yet due >>> >>> Due to certain business reasons, I would now like to do the following: >>> >>> 1. Remove installments 9 to 12 from the existing loan which are not >>> due yet. >>> 2. Create a new loan with: >>> - Disbursement date as today (the date when this activity is >>> performed). >>> - Repayment schedule consisting only of installments 9 to 12 from >>> the original loan. >>> >>> In other words, the first loan should retain installments 1 to 8, and a >>> new loan should be created for the remaining future installments (9 to 12). >>> I would like to understand: >>> >>> - Whether this is possible in Fineract. >>> - If so, what is the recommended approach (API, loan rescheduling, >>> refinance, write-off and rebook, or any other supported method). >>> >>> Any guidance, documentation references, or best practices would be >>> greatly appreciated. >>> Thank you for your support. >>> >>> Regards, >>> Bhaskar Tiwari >>> >>> >>> >>> >>> *"Print this mail only if absolutely necessary. Save Paper. Save Trees."* * >>> Disclaimer: *“This electronic mail message sent from StrideOne (Stride >>> Fintree Private Limited) may contain Confidential/Restricted/Internal >>> information and should only be viewed by the intended recipients. Under no >>> circumstances may any such information be disclosed, copied, used or >>> distributed to any unauthorized persons or entities without the written >>> consent of Strideone. If you are not the intended recipient, any review, >>> retransmission, dissemination or reliance on the content of these materials >>> is strictly prohibited and may be the subject of legal action. If you >>> received this email in error, please notify the sender and delete the >>> message immediately.” >>> >>> >>> >>> *"Print this mail only if absolutely necessary. Save Paper. Save Trees."* * >>> Disclaimer: *“This electronic mail message sent from StrideOne (Stride >>> Fintree Private Limited) may contain Confidential/Restricted/Internal >>> information and should only be viewed by the intended recipients. Under no >>> circumstances may any such information be disclosed, copied, used or >>> distributed to any unauthorized persons or entities without the written >>> consent of Strideone. If you are not the intended recipient, any review, >>> retransmission, dissemination or reliance on the content of these materials >>> is strictly prohibited and may be the subject of legal action. If you >>> received this email in error, please notify the sender and delete the >>> message immediately.” >>> >>> >>> >>> *"Print this mail only if absolutely necessary. Save Paper. Save Trees."* * >>> Disclaimer: *“This electronic mail message sent from StrideOne (Stride >>> Fintree Private Limited) may contain Confidential/Restricted/Internal >>> information and should only be viewed by the intended recipients. Under no >>> circumstances may any such information be disclosed, copied, used or >>> distributed to any unauthorized persons or entities without the written >>> consent of Strideone. If you are not the intended recipient, any review, >>> retransmission, dissemination or reliance on the content of these materials >>> is strictly prohibited and may be the subject of legal action. If you >>> received this email in error, please notify the sender and delete the >>> message immediately.” >>> >> > > -- > -- > Paul >
