Employee Loans
Shaari's loan management feature lets you issue loans to employees and track repayment through automatic payroll deductions. The system handles principal amounts, interest calculations, repayment schedules, and integrates directly with payroll processing.
Issuing Loans to Employees
To create a new employee loan:
- Navigate to HR Management > Loans.
- Click New Loan or Add Loan.
- Select the employee receiving the loan.
- Fill in the loan details (see below).
- Click Save or Submit.
The loan is created and, once approved, its repayment schedule is generated automatically.
Only active employees can receive loans. If an employee has an existing active loan, review their repayment capacity before issuing a new one.
Loan Details
Each loan record captures the following information:
| Field | Description |
|---|---|
| Employee | The employee receiving the loan |
| Principal Amount | The total loan amount disbursed to the employee |
| Interest Rate | Annual interest rate applied to the loan (can be 0% for interest-free loans) |
| Loan Term | Number of months over which the loan will be repaid |
| Start Date | When repayment begins (typically the next payroll cycle) |
| Monthly Installment | Calculated based on principal, interest, and term |
| Purpose / Notes | Reason for the loan (optional) |
Interest-free loans are common in many organizations. Set the interest rate to 0% and the system will calculate equal monthly installments based on the principal divided by the loan term.
Repayment Schedules
When a loan is created, Shaari generates a detailed repayment schedule showing:
- Installment number -- Sequential number (1, 2, 3, ...)
- Due date -- The payroll period in which the installment is due
- Installment amount -- The fixed monthly payment
- Principal portion -- How much of the installment goes toward the principal
- Interest portion -- How much goes toward interest (if applicable)
- Remaining balance -- Outstanding balance after each payment
The schedule gives both the employee and HR a clear view of the entire repayment timeline.
Example Schedule
For a 12,000 SAR loan at 0% interest over 12 months:
| # | Due Date | Installment | Principal | Interest | Balance |
|---|---|---|---|---|---|
| 1 | Feb 2026 | 1,000 | 1,000 | 0 | 11,000 |
| 2 | Mar 2026 | 1,000 | 1,000 | 0 | 10,000 |
| ... | ... | ... | ... | ... | ... |
| 12 | Jan 2027 | 1,000 | 1,000 | 0 | 0 |
Monthly Deductions from Payroll
Loan repayments are integrated directly into the payroll system:
- Each payroll run checks for active loans with installments due in that period.
- The installment amount is automatically added as a deduction in the employee's payroll calculation.
- The deduction appears as a separate line item on the salary slip labeled as "Loan Repayment."
- After the payroll run is finalized, the corresponding installment in the repayment schedule is marked as paid.
If an employee is excluded from a payroll run (due to leave, termination, or error), their loan installment for that period is not automatically deducted. You may need to handle the missed installment in the next payroll cycle or through manual adjustment.
Loan Status Tracking
Each loan has a status indicating where it stands in its lifecycle:
| Status | Description |
|---|---|
| Pending | Loan has been created but not yet approved |
| Approved | Loan is approved and ready for disbursement |
| Rejected | Loan request was denied |
| Active | Loan has been disbursed and repayments are in progress |
| Completed | All installments have been paid; loan is fully repaid |
| Defaulted | Repayments have been missed and the loan is in default |
| Written Off | Loan has been written off as unrecoverable |
You can filter the loan list by status to quickly see active loans, pending approvals, or completed records.
Loan Progress
Open any active loan to see:
- Total amount repaid so far
- Remaining balance
- Number of installments paid vs. total
- Next installment date and amount
Loan Documents (PDF)
Generate PDF documents related to employee loans:
- Loan Agreement -- A formal document outlining the loan terms, repayment schedule, and conditions. Can be printed and signed by both the employee and an authorized company representative.
- Repayment Schedule -- A standalone PDF of the full repayment schedule.
- Loan Summary -- A one-page overview of the loan status, payments made, and remaining balance.
To generate a loan document:
- Open the loan record.
- Click the PDF or Generate Document button.
- Select the document type.
- Download or print the generated PDF.
Generate and have employees sign the loan agreement PDF before disbursing the loan amount. This provides a formal record of the terms both parties agreed to.