> ## Documentation Index
> Fetch the complete documentation index at: https://docs.hitaji360.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Bank Loans

> Use Bank Loans to record loans your business has taken — from a bank or other lender — and to track their repayments over time.

Use **Bank Loans** to record loans your business has **taken** — from a bank or other lender — and to track their repayments over time. Hitaji 360 builds the repayment schedule for you, posts the disbursement and each repayment to the General Ledger, and keeps the outstanding balance current.

**You'll find this at:** `/accounting/loans` — in the navigation this page is labelled **Loans** ("Manage and track organization loans").

> This is for money your business **borrows** (a liability). For money your business **lends out**, see [Debts (Money Lent)](/accounting/user/transactions/debts).

> 📷 *Screenshot: The Loans list page with the "Add Loan" button and loan statuses — to be added.*

***

## The life of a loan

A loan moves through these statuses:

| Status                       | Meaning                                                                                                     |
| ---------------------------- | ----------------------------------------------------------------------------------------------------------- |
| **Draft**                    | Created and editable; nothing posted to the ledger yet.                                                     |
| **Active**                   | Disbursed — the loan money has hit your bank and the liability is on the books. Repayments can be recorded. |
| **Paid off**                 | The outstanding balance has reached zero.                                                                   |
| **Closed**                   | Manually closed (from Active or Paid off).                                                                  |
| **Defaulted / Restructured** | Other lifecycle states the loan can carry.                                                                  |

***

## Step 1 — Create the loan (Draft)

Click **Add Loan** and fill in the terms:

| Field                           | What to enter                                                     |
| ------------------------------- | ----------------------------------------------------------------- |
| **Name**                        | A label for the loan.                                             |
| **Loan type**                   | Term loan, line of credit, mortgage, equipment finance, or other. |
| **Lender name**                 | Who you borrowed from.                                            |
| **Lender contact**              | Optional — link to a contact record.                              |
| **Principal amount**            | How much you borrowed.                                            |
| **Interest rate**               | The **annual** rate as a percentage (e.g. `12.5` for 12.5%).      |
| **Term (months)**               | How long the loan runs.                                           |
| **Repayment frequency**         | Monthly, quarterly, semi-annually, or annually.                   |
| **Disbursement date**           | When the money is/was received.                                   |
| **First payment date**          | When the first repayment is due.                                  |
| **Liability account**           | The loan-payable account (a liability) the debt sits in.          |
| **Interest expense account**    | Where interest cost is booked.                                    |
| **Disbursement (bank) account** | The bank account the loan money lands in.                         |
| **Notes / Reference number**    | Optional.                                                         |

On save, Hitaji 360:

* Assigns a **loan number** (e.g. `LN-0001`).
* Calculates the **maturity date** from the disbursement date plus the term.
* Generates a full **amortization schedule** — period by period, splitting each payment into principal and interest, with opening/closing balances and due dates — and sets the **next payment** date and amount from the first row.

The loan is created as a **Draft**. While it's a draft you can **edit** it (only drafts are editable) — and if you change any financial term, the maturity date, schedule, and next-payment figures are recalculated automatically. You can also **delete** a draft loan.

> 📷 *Screenshot: The loan detail page showing the generated amortization schedule — to be added.*

***

## Step 2 — Activate the loan (post the disbursement)

When the money actually arrives, **Activate** the loan. This moves it from Draft to **Active** and posts the disbursement journal entry.

### Behind the scenes (disbursement)

* **Debit** your disbursement (bank) account for the principal — the cash arrives.
* **Credit** the loan liability account for the principal — you now owe it.

Only **Draft** loans can be activated.

***

## Step 3 — Record repayments

As you make payments, record each one against the loan with **Record repayment**. You enter:

| Field                        | What to enter                            |
| ---------------------------- | ---------------------------------------- |
| **Repayment date**           | When you paid.                           |
| **Principal amount**         | The principal portion of this payment.   |
| **Interest amount**          | The interest portion of this payment.    |
| **Payment account**          | The bank account the money is paid from. |
| **Reference number / Notes** | Optional.                                |

Repayments can only be recorded on **Active** loans.

### Behind the scenes (repayment)

Each repayment posts:

* **Debit** the loan liability account for the **principal** — reducing what you owe.
* **Debit** the interest expense account for the **interest** — recording the cost of borrowing.
* **Credit** the payment (bank) account for the **total** (principal + interest) — the cash going out.

After posting, Hitaji 360 updates the loan's running totals — total repaid, total interest paid, and **outstanding balance** (reduced by the principal portion) — marks the matching amortization row as paid, and advances the **next payment** pointer. When the outstanding balance reaches zero the loan is automatically set to **Paid off**.

### Undoing a repayment

Deleting a repayment **reverses** it: the loan totals are rolled back, the outstanding balance goes back up by the principal, the amortization row is un-marked, and a loan that had been Paid off reverts to **Active**.

***

## Closing a loan

Use **Close** to mark an **Active** or **Paid off** loan as **Closed**. Closing is a status change only — it doesn't post a journal entry.

***

## Statuses, schedules & tracking

* Each loan keeps a live **outstanding balance**, **total repaid**, **total interest paid**, and **next payment** date/amount.
* The **amortization schedule** records, per period, the opening balance, principal, interest, total payment, closing balance, and whether that period has been paid (and when).
* A **stats** view summarises loans across the book.

***

## Working across multiple businesses

Loans, their accounts, and their repayments are scoped to a single **accounting book**, and each business has its own book. Make sure you're in the correct business before recording a loan — the liability, interest-expense, and bank accounts must all belong to that book.

***

## Related

* [Bank reconciliation](/accounting/user/transactions/bank-reconciliation) — the loan disbursement and each repayment move your bank balance and will appear on your bank statement.
* [Debts (Money Lent)](/accounting/user/transactions/debts) — for money your business has **lent out** (the opposite side: an asset, not a liability).
* [Payments & Receipts](/accounting/user/transactions/payments) — for ordinary money in and out.