ClayHR separates the loan application (the employee's request, assessment and approvals) from the loan record (the finalized amount and repayment obligations). HR, loan managers and finance teams coordinate these stages after an employee accepts approved terms.

Loan lifecycle at a glance

1. Draft: Application being prepared.
2. Pending Review / Pending Approval: Financial assessment and approval process.
3. Approved or Rejected: Required approvers complete their decisions.
4. Accepted: Employee accepts the approved loan terms.
5. Pending Loan Creation / Pending Disbursement: HR finalizes the loan and coordinates payment.
6. Disbursed and Active: Loan amount is due to be transferred and installments are tracked.
7. Closed / Archived: Completed loan record or retained history, where supported.

Intermediate status names differ across the design notes and examples. Use the actual statuses in your organization's environment.

1. Review accepted applications

When an employee accepts an approved application, the loan management team is notified. Open the accepted application and check its approved amount, interest rate, duration, eligibility assessment, attachments and acceptance record.

2. Finalize or create the loan

The documented flow includes a Finalize Loan action opening a form prefilled from the approved application. Another design variant names the action Create Loan Entity and explicitly creates a separate loan record linked to the application. Use the action available in your version and verify all permitted edits before saving.

Loan data includes the approved loan amount, interest rate, term in months, disbursement date, first installment date, monthly installment and remaining principal balance. The original application is retained for reference.

3. Coordinate disbursement

1. Accounting or Finance reviews the accepted loans scheduled for disbursement.
2. Complete the actual payment arrangements through your organization's approved banking and accounting process.
3. Verify the scheduled Disbursement Date.
4. The documented workflow updates the status to Disbursed when that date is reached.

Important: A scheduled-date status update alone does not verify that the bank transfer succeeded; reconcile the disbursement separately.

4. View active loans and repayments

On the Loans homepage, open the Active Loans tab. The illustrated list includes loan number, loan type, applicant, principal, interest rate, repayment amount, start date, loan duration, remaining balance and a repayment-progress indicator.

Employees can review their own active loans under Financials > Loans. The loan detail view is designed to show the current balance and next payment information.

5. Reconcile salary-linked deductions

Employee loans are designed around payroll-linked monthly deductions. Finance or payroll users should check that the installment amount and first-installment date agree with the payroll arrangements, and reconcile each deduction against the remaining loan balance. Estimates shown on an application are preliminary; use the finalized loan record for financial processing.

Reporting and exceptions

The application list and active loans list support review of pending applications, loans awaiting disbursement and ongoing balances. Early payoff and delinquency are identified as future considerations in the design notes; the source does not establish a complete workflow for either.

Related articles

How Employees Apply and Track Loans | Configuring Loan Types and Approvals