Loan Classification
Overview
Below is a business-focused explanation of the Loan Classification document in Dafater.
What is Loan Classification used for?
Loan Classification is used to define and manage the different categories under which loans are grouped in Dafater. It provides a clear business structure for organizing loans based on their nature, risk level, or business purpose.
By using Loan Classification, organizations ensure that every loan is consistently identified and treated according to internal policies, regulatory needs, and management reporting requirements.
In simple terms, it answers the question:
“What type of loan is this, from a business perspective?”
Prerequisites and setup requirements
Before using Loan Classification, the following should be in place:
- A clear business understanding of how loans should be grouped (for example: personal loans, commercial loans, secured loans, high-risk loans).
- Alignment with internal credit policies and compliance guidelines.
- Agreement among finance, risk, and operations teams on the classification structure.
This setup is usually done once and updated only when business rules or regulations change.
Typical workflow and business process fit
The Loan Classification process typically follows this flow:
Define loan categories
Business or credit managers create Loan Classification records to represent approved loan categories.Apply during loan processing
When a new loan is created, it is assigned a Loan Classification based on its characteristics.Ongoing monitoring and reporting
Classifications are used to review loan portfolios, assess exposure, and support decision-making.Policy and compliance alignment
Classifications help ensure loans are managed according to defined rules throughout their lifecycle.
This document quietly supports many downstream processes without requiring frequent changes.
Key business scenarios where Loan Classification is essential
Loan Classification plays a critical role in scenarios such as:
Risk management
Identifying higher-risk versus lower-risk loans for monitoring and review.Portfolio analysis
Understanding how much of the loan book falls into each category.Policy enforcement
Ensuring loans follow approval limits, pricing rules, or review cycles based on classification.Management reporting
Providing clear, structured data for leadership and regulatory reporting.
Important considerations for users
When working with Loan Classification, users should keep in mind:
- Classifications should be clear, consistent, and easy to understand.
- Avoid creating too many categories, which can complicate reporting.
- Changes to classifications may affect existing loans and reports, so updates should be done carefully.
- Regularly review classifications to ensure they still reflect current business strategy and risk appetite.
In summary, Loan Classification is a foundational business document in Dafater that ensures loans are organized, managed, and analyzed in a structured and meaningful way.
Basic Information
- Module: Loan Management
- Document Type: Other
Fields
| Field Name | Label | Type | Required | Options | Description |
|---|---|---|---|---|---|
| classification_code | Classification Code | Data | ✓ | - | Unique code identifying loan classification within Dafater |
| classification_name | Classification Name | Data | ✓ | - | Descriptive name of loan classification for reporting and operations |
Permissions
| Role | Read | Write | Create | Delete | Submit | Cancel |
|---|---|---|---|---|---|---|
| Loan Manager | ✓ | ✓ | ✓ | ✓ | ||
| System Manager | ✓ | ✓ | ✓ | ✓ |
Related DocTypes
| DocType | Relationship | Module |
|---|---|---|
| Loan | Linked from | Loan Management |