Refund a Payment Transaction

Along with the reversal, you can also refund the borrower's payment. GL entries are created for both the transactions, payment reversal, and payment refund. Refunds can be made anytime during the life of a contract without waiting for loan closure. However, refund of only full payments is possible. 

Once the Loan Refund batch job runs, the refund of the latest payment is processed by the LoanRepaymentRefundTxnSweepToACHJob job, which is linked in the SOD job chain, and the associated ACH file is created. 

Example - Borrower made a payment of 100,000 instead of 10,000, and requests for a refund of 90,000 made in error. Lender does a full refund of 100,000, and requests for payment of 10,000. The payment reversal, and refund of the last payment transaction to the borrower is made by the lender.