Loan refinancing allows you to extend, shorten, or adjust a customer’s loan while adding new capital if needed, instead of requiring them to pay off and take a new loan. This guide explains how to set up your products to allow refinancing and how to refinance a specific loan directly from the admin console. 


Enabling Loan Refinancing on a Loan Product

Before refinancing any loan, you need to activate refinancing settings on the loan product:


1. Follow the guide here to locate a loan product setting / attribute 

2. Locate the Refinance Loan options on the Product settings tab 

3. Click the more options icon (:) beside the setting and click Edit to begin configurations 



4. A new modal with options to be configured should open 


Refinance Loan Options: Definitions

  • Allow Loan Refinancing: Enables refinancing for this product, allowing existing loans to be adjusted and new capital to be added without requiring full payoff and new loan creation.
  • Allow Extension of Loan Tenor: Allows the loan tenor to be increased during refinancing, giving the customer a longer time to repay.
  • Allow Shortening of Loan Tenor: Allows the loan tenor to be reduced during refinancing, enabling faster loan payoff if desired.
  • Allow Interest Rate Change: Allows you to set a new interest rate for the loan during refinancing, either increasing or reducing the rate.
  • Add Unpaid Penalties to the New Capital: Any unpaid penalties (e.g., late payment penalties) will be added to the refinanced loan’s principal, allowing the customer to pay them over the new loan term.
  • Add Unpaid Fees to the New Capital:  Any unpaid fees (e.g., management fees, disbursement fees) will be added to the refinanced loan’s principal.
  • Apply Fees To: New Amount or All Amount - Determines whether applicable fees (like management fees) during refinancing will be calculated on: New Amount: Only the additional principal being added, All Amount: The total outstanding principal plus any additional principal.


5. Check and select the configurations that fit your business model 

6. Click on the Submit button 



7. Review and then confirm your configurations before clicking the Confirm button to save your configurations. 



Refinancing a Specific Loan

When a customer requests refinancing or you need to restructure a loan:


1️⃣ Navigate to the loan you wish to refinance. You can follow the guide here to locate a loan.

2️⃣ Click the more options icon (⋮) next to “Comments and Notes.”

3️⃣ Select “Refinance Loan.”



4️⃣ Enter the following details:

  • Additional Principal: Amount to add to the current principal (optional).

  • New Interest Rate: Updated interest rate for the refinanced loan (optional, if allowed).

  • New Tenor: New loan duration in months (either extended or reduced).

5️⃣ The system will automatically generate a new repayment schedule based on the updated details.

6️⃣ Click Submit, then Confirm after reviewing the refinancing summary.




What Happens After Refinancing?

✅ Any additional principal is disbursed to the same destination as the original loan disbursement.
✅ The customer receives an email notification confirming the refinancing.
✅ If an offer letter was previously attached, a new offer letter with updated terms will be sent to the customer.
✅ The loan’s detail page will display a “Refinance History” section for tracking and audit purposes.