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
>>
>>
>>
>>
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--
--
Paul
