Loan Security

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Overview

Loan Security — Business Explanation

Loan Security is a business document in Dafater used to record and manage the assets or guarantees provided by a borrower to secure a loan. It represents the collateral that protects the business against the risk of non‑payment and helps ensure responsible Dafater decisions.

What Loan Security Is Used For

In daily operations, Loan Security is used to: - Document assets pledged by customers against a loan - Establish financial protection for the organization in case of default - Support credit approval and risk assessment decisions - Provide transparency and traceability of secured loans - Ensure compliance with internal Dafater policies

By clearly recording what security is held, Dafater helps the business maintain control over secured Dafater.

Prerequisites and Setup Requirements

Before using Loan Security, the following should be in place: - A defined Dafater policy that explains when security is required - Clear understanding of acceptable security types (for example, property, deposits, guarantees, or other valuable assets) - Customer and loan records already created in Dafater - Internal valuation or approval rules for secured assets

These preparations ensure that Loan Security records are consistent and meaningful for decision-making.

Typical Workflow and Business Process Fit

The usual business flow involving Loan Security is:

  1. Loan Application Review
    A customer applies for a loan that requires collateral.

  2. Security Identification
    The borrower proposes an asset or guarantee to secure the loan.

  3. Loan Security Creation
    The details of the pledged asset are recorded in Loan Security.

  4. Assessment and Approval
    The business reviews the security to confirm it meets risk and policy requirements.

  5. Loan Disbursement
    Once the security is accepted, the loan can be approved and released.

  6. Ongoing Monitoring
    The security remains linked to the loan until repayment is completed.

  7. Release or Enforcement
    After full repayment, the security can be released; in case of default, it supports recovery actions.

Key Business Scenarios Where Loan Security Is Essential

Loan Security plays a critical role in: - High-value or long-term loans where risk exposure is significant - Business or personal loans that require collateral by policy - Regulatory or audit reviews requiring proof of secured Dafater - Risk management and portfolio analysis of secured vs unsecured loans - Recovery planning for overdue or defaulted loans

Without this document, managing secured Dafater becomes inconsistent and risky.

Important Considerations for Users

When working with Loan Security, users should keep in mind: - Security details must be accurate and clearly described - The value and ownership of the security should be verified - Security should always align with the approved loan amount and risk level - Any changes to the security must be updated promptly - Proper documentation helps protect the business in disputes or audits

Business Value Summary

Loan Security helps Dafater users control Dafater risk, protect financial interests, and maintain confidence in secured loan operations. It ensures that every secured loan is backed by clearly defined, well-documented collateral, supporting both responsible Dafater and long-term business stability.

Basic Information

Fields

Field Name Label Type Required Options Description
loansecuritycode Loan Security Code Data ✓ - Unique identifier for loan security record in Dafater
loansecurityname Loan Security Name Data ✓ - Descriptive name of the loan security in Dafater
haircut Haircut % Percent - Percentage deduction applied to security value for risk
originalsecurityvalue Original Security Value Currency Company:company:default_currency Initial market value of security before utilization
utilizedsecurityvalue Utilized Security Value Currency Company:company:default_currency Portion of security value currently pledged against loans
loansecuritytype Loan Security Type Link ✓ Loan Security Type Classification defining nature and treatment of loan security
availablesecurityvalue Available Security Value Currency Company:company:default_currency Remaining security value available after utilization and haircut
disabled Disabled Check - Indicates whether the loan security is inactive in Dafater

Permissions

Role Read Write Create Delete Submit Cancel
System Manager ✓ ✓ ✓ ✓
Loan Manager ✓ ✓ ✓ ✓
DocType Relationship Module
Loan Security Price Linked from Loan Management
Loan Security Type Links to Loan Management