# Configuring and Disbursing of Top-Up Loan

A top-up loan allows borrower to take a loan amount on top of his/her existing loan, this loan is offered only after a certain number of repayments is made on existing loan amount as this gives a fair idea about the borrower’s repayment track record. Here the current loan will be paid-off using the balance of top-up loan once the loan is disbursed.

**Example:**&#x20;

Assume ‘Bob’ has taken a loan of 10,000$ and say he had made a repayment of 5000$, now he wants to top-up his loan by 10,000$. Once the top-up loan is approved his existing loan amount of 5000$ will be paid-off using balance of  top-up loan and a new loan of amount 15000$ is disbursed. This new loan amount is the combination 5000$ (Paid-off amount) and 10000$ (New top-up loan).

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| Top-up loan amount should be greater than the previous loan balance (principal+Interest). |
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#### How to configure Top-Up Loan?

1. Navigate to **Admin**>> **Products**>> **Loan Products**>> **Create Loan Product**, define the required fields and if the loan product supports top-up loans then select **“is allowed to be used for providing TopUp Loans?”** under Settings field.

&#x20;2\. Click on the client to whom loan top-up has to be done, next select the **‘loan product’** that is associated with loan top-up feature. Now fill in the required fields in new loan application,  select

&#x20;        **“is Topup Loan?”** and choose the loan account number that has to be closed.

#### How to Disburse Top-Up Loan?

1. Select a client who has taken a loan and had made some repayments

&#x20;   2\. If the borrower wants to top-up his loan then click on ![](https://mifosforge.jira.com/wiki/download/thumbnails/153387012/5.png?version=1\&modificationDate=1472118945545\&cacheVersion=1\&api=v2\&width=65). Next select a loan product that is configured for **Top-Up** loan.

&#x20;   3\. Select **"Is Topup Loan"** and  pick the appropriate loan account from "**Choose loan** **to close"** drop down that has to be closed (paid-off).

&#x20;   4\. Click ![](https://mifosforge.jira.com/wiki/download/thumbnails/153387012/8.png?version=1\&modificationDate=1472120072832\&cacheVersion=1\&api=v2\&width=55)\
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&#x20;   5\. Next "**Approve**" and "**Disburse**" the loan.

&#x20;   6\. Now in client's page you can see that the loan earlier has been **paid-off** and a new **Top-Up** loan is disbursed.

&#x20;    7\. Click on the loan to view loan **'Summary'**, **'Transactions'**, **'Repayment Schedule'**.

&#x20;   8\. This is **Transaction** page.
