Loan Write Off

A loan write-off refers to the process by which a lender formally acknowledges that a loan is unlikely to be repaid and removes it from its balance sheet as an asset. This is an accounting action that reflects the lender's recognition of the loss associated with the uncollectible loan. However, writing off a loan does not mean that the borrower is absolved of the debt; the borrower is still legally obligated to repay the loan, and the lender may continue to attempt to recover the funds through various means.

To access the Loan Write Off, go to:

Home > Lending > Loan Adjustments> Loan Write Off

2. How to create a Loan Write Off

1. Go to the Loan Write Off List, and click on Add Loan Write Off.
2. Enter the loan account and the principal amount to be written off
3. Save and submit

On submitting the Loan Write Off entry the loan is marked as written off and the accounting entries are posted as below