FINERACT-1968: Support horizontal and vertical installment processing

custom/acme/loan/processor/src/main/java/com/acme/fineract/loan/processor/AcmeLoanRepaymentScheduleTransactionProcessor.java

@@ -24,9 +24,9 @@ import org.springframework.stereotype.Component;
 @Component
 public class AcmeLoanRepaymentScheduleTransactionProcessor extends FineractStyleLoanRepaymentScheduleTransactionProcessor {
 
-    private static final String STRATEGY_CODE = "acme-standard-strategy";
+    public static final String STRATEGY_CODE = "acme-standard-strategy";
 
-    private static final String STRATEGY_NAME = "ACME Corp.: standard loan transaction processing strategy";
+    public static final String STRATEGY_NAME = "ACME Corp.: standard loan transaction processing strategy";
 
     @Override
     public String getCode() {

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/LoanRepaymentScheduleInstallment.java

@@ -34,6 +34,7 @@ import org.apache.fineract.infrastructure.core.domain.AbstractAuditableWithUTCDa
 import org.apache.fineract.infrastructure.core.service.DateUtils;
 import org.apache.fineract.organisation.monetary.domain.MonetaryCurrency;
 import org.apache.fineract.organisation.monetary.domain.Money;
+import org.apache.fineract.portfolio.loanproduct.domain.AllocationType;
 import org.apache.fineract.portfolio.repaymentwithpostdatedchecks.domain.PostDatedChecks;
 
 @Entity
@@ -424,6 +425,24 @@ public class LoanRepaymentScheduleInstallment extends AbstractAuditableWithUTCDa
         this.penaltyCharges = null;
     }
 
+    public interface PaymentFunction {
+
+        Money accept(LocalDate transactionDate, Money transactionAmountRemaining);
+    }
+
+    public PaymentFunction getPaymentFunction(AllocationType allocationType, PaymentAction action) {
+        return switch (allocationType) {
+            case PENALTY -> PaymentAction.PAY.equals(action) ? this::payPenaltyChargesComponent
+                    : PaymentAction.UNPAY.equals(action) ? this::unpayPenaltyChargesComponent : null;
+            case FEE -> PaymentAction.PAY.equals(action) ? this::payFeeChargesComponent
+                    : PaymentAction.UNPAY.equals(action) ? this::unpayFeeChargesComponent : null;
+            case INTEREST -> PaymentAction.PAY.equals(action) ? this::payInterestComponent
+                    : PaymentAction.UNPAY.equals(action) ? this::unpayInterestComponent : null;
+            case PRINCIPAL -> PaymentAction.PAY.equals(action) ? this::payPrincipalComponent
+                    : PaymentAction.UNPAY.equals(action) ? this::unpayPrincipalComponent : null;
+        };
+    }
+
     public Money payPenaltyChargesComponent(final LocalDate transactionDate, final Money transactionAmountRemaining) {
 
         final MonetaryCurrency currency = transactionAmountRemaining.getCurrency();
@@ -967,4 +986,8 @@ public class LoanRepaymentScheduleInstallment extends AbstractAuditableWithUTCDa
     public void resetPrincipalDue() {
         this.principal = null;
     }
+
+    public enum PaymentAction {
+        PAY, UNPAY
+    }
 }

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/AbstractLoanRepaymentScheduleTransactionProcessor.java

@@ -765,7 +765,7 @@ public abstract class AbstractLoanRepaymentScheduleTransactionProcessor implemen
         loanTransaction.updateLoanTransactionToRepaymentScheduleMappings(transactionMappings);
     }
 
-    private void undoChargesPaidAmountBy(final LoanTransaction loanTransaction, final Money feeCharges, final Set<LoanCharge> charges,
+    protected void undoChargesPaidAmountBy(final LoanTransaction loanTransaction, final Money feeCharges, final Set<LoanCharge> charges,
             final Integer installmentNumber) {
 
         Money amountRemaining = feeCharges;

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/impl/AdvancedPaymentScheduleTransactionProcessor.java

@@ -18,15 +18,21 @@
  */
 package org.apache.fineract.portfolio.loanaccount.domain.transactionprocessor.impl;
 
+import static java.util.stream.Collectors.mapping;
+import static java.util.stream.Collectors.toList;
+
 import java.math.BigDecimal;
 import java.math.MathContext;
 import java.time.LocalDate;
 import java.util.ArrayList;
 import java.util.Collections;
 import java.util.Comparator;
+import java.util.LinkedHashMap;
 import java.util.List;
-import java.util.Optional;
+import java.util.Map;
 import java.util.Set;
+import java.util.function.Function;
+import java.util.function.Predicate;
 import java.util.stream.Collectors;
 import lombok.AllArgsConstructor;
 import lombok.Getter;
@@ -47,6 +53,8 @@ import org.apache.fineract.portfolio.loanaccount.domain.LoanTransaction;
 import org.apache.fineract.portfolio.loanaccount.domain.LoanTransactionToRepaymentScheduleMapping;
 import org.apache.fineract.portfolio.loanaccount.domain.SingleLoanChargeRepaymentScheduleProcessingWrapper;
 import org.apache.fineract.portfolio.loanaccount.domain.transactionprocessor.AbstractLoanRepaymentScheduleTransactionProcessor;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleProcessingType;
+import org.apache.fineract.portfolio.loanproduct.domain.DueType;
 import org.apache.fineract.portfolio.loanproduct.domain.FutureInstallmentAllocationRule;
 import org.apache.fineract.portfolio.loanproduct.domain.LoanProductRelatedDetail;
 import org.apache.fineract.portfolio.loanproduct.domain.PaymentAllocationTransactionType;
@@ -58,7 +66,7 @@ public class AdvancedPaymentScheduleTransactionProcessor extends AbstractLoanRep
 
     public static final String ADVANCED_PAYMENT_ALLOCATION_STRATEGY = "advanced-payment-allocation-strategy";
 
-    private final SingleLoanChargeRepaymentScheduleProcessingWrapper loanChargeProcessor = new SingleLoanChargeRepaymentScheduleProcessingWrapper();
+    public final SingleLoanChargeRepaymentScheduleProcessingWrapper loanChargeProcessor = new SingleLoanChargeRepaymentScheduleProcessingWrapper();
 
     @Override
     public String getCode() {
@@ -104,6 +112,113 @@ public class AdvancedPaymentScheduleTransactionProcessor extends AbstractLoanRep
         throw new NotImplementedException();
     }
 
+    @Override
+    public ChangedTransactionDetail reprocessLoanTransactions(LocalDate disbursementDate, List<LoanTransaction> loanTransactions,
+            MonetaryCurrency currency, List<LoanRepaymentScheduleInstallment> installments, Set<LoanCharge> charges) {
+        if (charges != null) {
+            for (final LoanCharge loanCharge : charges) {
+                if (!loanCharge.isDueAtDisbursement()) {
+                    loanCharge.resetPaidAmount(currency);
+                }
+            }
+        }
+
+        for (final LoanRepaymentScheduleInstallment currentInstallment : installments) {
+            currentInstallment.resetBalances();
+            currentInstallment.updateDerivedFields(currency, disbursementDate);
+        }
+
+        List<ChargeOrTransaction> chargeOrTransactions = createSortedChargesAndTransactionsList(loanTransactions, charges);
+
+        final ChangedTransactionDetail changedTransactionDetail = new ChangedTransactionDetail();
+        for (final ChargeOrTransaction chargeOrTransaction : chargeOrTransactions) {
+            chargeOrTransaction.getLoanTransaction().ifPresent(loanTransaction -> processSingleTransaction(loanTransaction, currency,
+                    installments, charges, changedTransactionDetail));
+            chargeOrTransaction.getLoanCharge()
+                    .ifPresent(loanCharge -> processSingleCharge(loanCharge, currency, installments, disbursementDate));
+        }
+        reprocessInstallments(installments, currency);
+        return changedTransactionDetail;
+    }
+
+    @Override
+    public void processLatestTransaction(LoanTransaction loanTransaction, MonetaryCurrency currency,
+            List<LoanRepaymentScheduleInstallment> installments, Set<LoanCharge> charges, Money overpaidAmount) {
+        switch (loanTransaction.getTypeOf()) {
+            case DISBURSEMENT -> handleDisbursement(loanTransaction, currency, installments);
+            case WRITEOFF -> handleWriteOff(loanTransaction, currency, installments);
+            case REFUND_FOR_ACTIVE_LOAN -> handleRefund(loanTransaction, currency, installments, charges);
+            case CHARGEBACK -> handleChargeback(loanTransaction, currency, overpaidAmount, installments);
+            case REPAYMENT, MERCHANT_ISSUED_REFUND, PAYOUT_REFUND, GOODWILL_CREDIT, CHARGE_REFUND, CHARGE_ADJUSTMENT, DOWN_PAYMENT,
+                    WAIVE_INTEREST, RECOVERY_REPAYMENT ->
+                handleRepayment(loanTransaction, currency, installments, charges);
+            case CHARGE_OFF -> handleChargeOff(loanTransaction, currency, installments);
+            case CHARGE_PAYMENT -> handleChargePayment(loanTransaction, currency, installments, charges);
+            // TODO: Cover rest of the transaction types
+            default -> {
+                log.warn("Unhandled transaction processing for transaction type: {}", loanTransaction.getTypeOf());
+            }
+        }
+    }
+
+    @Override
+    protected void handleRefund(LoanTransaction loanTransaction, MonetaryCurrency currency,
+            List<LoanRepaymentScheduleInstallment> installments, Set<LoanCharge> charges) {
+        Money zero = Money.zero(currency);
+        List<LoanTransactionToRepaymentScheduleMapping> transactionMappings = new ArrayList<>();
+        Money transactionAmountUnprocessed = loanTransaction.getAmount(currency);
+
+        List<LoanPaymentAllocationRule> paymentAllocationRules = loanTransaction.getLoan().getPaymentAllocationRules();
+        LoanPaymentAllocationRule defaultPaymentAllocationRule = paymentAllocationRules.stream()
+                .filter(e -> PaymentAllocationTransactionType.DEFAULT.equals(e.getTransactionType())).findFirst().orElseThrow();
+        LoanPaymentAllocationRule paymentAllocationRule = paymentAllocationRules.stream()
+                .filter(e -> loanTransaction.getTypeOf().equals(e.getTransactionType().getLoanTransactionType())).findFirst()
+                .orElse(defaultPaymentAllocationRule);
+        Balances balances = new Balances(zero, zero, zero, zero);
+        List<PaymentAllocationType> paymentAllocationTypes;
+        FutureInstallmentAllocationRule futureInstallmentAllocationRule;
+        if (PaymentAllocationTransactionType.DEFAULT.equals(paymentAllocationRule.getTransactionType())) {
+            // if the allocation rule is not defined then the reverse order of the default allocation rule will be used
+            paymentAllocationTypes = new ArrayList<>(paymentAllocationRule.getAllocationTypes());
+            Collections.reverse(paymentAllocationTypes);
+            futureInstallmentAllocationRule = FutureInstallmentAllocationRule.LAST_INSTALLMENT;
+        } else {
+            paymentAllocationTypes = paymentAllocationRule.getAllocationTypes();
+            futureInstallmentAllocationRule = paymentAllocationRule.getFutureInstallmentAllocationRule();
+        }
+        if (LoanScheduleProcessingType.HORIZONTAL
+                .equals(loanTransaction.getLoan().getLoanProductRelatedDetail().getLoanScheduleProcessingType())) {
+            // TODO: implementation
+        } else if (LoanScheduleProcessingType.VERTICAL
+                .equals(loanTransaction.getLoan().getLoanProductRelatedDetail().getLoanScheduleProcessingType())) {
+            for (PaymentAllocationType paymentAllocationType : paymentAllocationTypes) {
+                transactionAmountUnprocessed = refundTransaction(loanTransaction, currency, installments, zero, transactionMappings,
+                        transactionAmountUnprocessed, futureInstallmentAllocationRule, balances, paymentAllocationType);
+                if (!transactionAmountUnprocessed.isGreaterThanZero()) {
+                    break;
+                }
+            }
+        }
+
+        loanTransaction.updateComponents(balances.getAggregatedPrincipalPortion(), balances.getAggregatedInterestPortion(),
+                balances.getAggregatedFeeChargesPortion(), balances.getAggregatedPenaltyChargesPortion());
+        loanTransaction.updateLoanTransactionToRepaymentScheduleMappings(transactionMappings);
+
+        final Set<LoanCharge> loanFees = extractFeeCharges(charges);
+        final Set<LoanCharge> loanPenalties = extractPenaltyCharges(charges);
+        Integer installmentNumber = null;
+
+        final Money feeCharges = loanTransaction.getFeeChargesPortion(currency);
+        if (feeCharges.isGreaterThanZero()) {
+            undoChargesPaidAmountBy(loanTransaction, feeCharges, loanFees, installmentNumber);
+        }
+
+        final Money penaltyCharges = loanTransaction.getPenaltyChargesPortion(currency);
+        if (penaltyCharges.isGreaterThanZero()) {
+            undoChargesPaidAmountBy(loanTransaction, penaltyCharges, loanPenalties, installmentNumber);
+        }
+    }
+
     private void processSingleTransaction(LoanTransaction loanTransaction, MonetaryCurrency currency,
             List<LoanRepaymentScheduleInstallment> installments, Set<LoanCharge> charges,
             ChangedTransactionDetail changedTransactionDetail) {
@@ -139,37 +254,6 @@ public class AdvancedPaymentScheduleTransactionProcessor extends AbstractLoanRep
         loanChargeProcessor.reprocess(currency, disbursementDate, installments, loanCharge);
     }
 
-    @Override
-    public ChangedTransactionDetail reprocessLoanTransactions(LocalDate disbursementDate, List<LoanTransaction> loanTransactions,
-            MonetaryCurrency currency, List<LoanRepaymentScheduleInstallment> installments, Set<LoanCharge> charges) {
-
-        // TODO: rewrite this whole logic step by step
-        if (charges != null) {
-            for (final LoanCharge loanCharge : charges) {
-                if (!loanCharge.isDueAtDisbursement()) {
-                    loanCharge.resetPaidAmount(currency);
-                }
-            }
-        }
-
-        for (final LoanRepaymentScheduleInstallment currentInstallment : installments) {
-            currentInstallment.resetBalances();
-            currentInstallment.updateDerivedFields(currency, disbursementDate);
-        }
-
-        List<ChargeOrTransaction> chargeOrTransactions = createSortedChargesAndTransactionsList(loanTransactions, charges);
-
-        final ChangedTransactionDetail changedTransactionDetail = new ChangedTransactionDetail();
-        for (final ChargeOrTransaction chargeOrTransaction : chargeOrTransactions) {
-            chargeOrTransaction.getLoanTransaction().ifPresent(loanTransaction -> processSingleTransaction(loanTransaction, currency,
-                    installments, charges, changedTransactionDetail));
-            chargeOrTransaction.getLoanCharge()
-                    .ifPresent(loanCharge -> processSingleCharge(loanCharge, currency, installments, disbursementDate));
-        }
-        reprocessInstallments(installments, currency);
-        return changedTransactionDetail;
-    }
-
     @NotNull
     private List<ChargeOrTransaction> createSortedChargesAndTransactionsList(List<LoanTransaction> loanTransactions,
             Set<LoanCharge> charges) {
@@ -184,26 +268,6 @@ public class AdvancedPaymentScheduleTransactionProcessor extends AbstractLoanRep
         return chargeOrTransactions;
     }
 
-    @Override
-    public void processLatestTransaction(LoanTransaction loanTransaction, MonetaryCurrency currency,
-            List<LoanRepaymentScheduleInstallment> installments, Set<LoanCharge> charges, Money overpaidAmount) {
-        switch (loanTransaction.getTypeOf()) {
-            case DISBURSEMENT -> handleDisbursement(loanTransaction, currency, installments);
-            case WRITEOFF -> handleWriteOff(loanTransaction, currency, installments);
-            case REFUND_FOR_ACTIVE_LOAN -> handleRefund(loanTransaction, currency, installments, charges);
-            case CHARGEBACK -> handleChargeback(loanTransaction, currency, overpaidAmount, installments);
-            case REPAYMENT, MERCHANT_ISSUED_REFUND, PAYOUT_REFUND, GOODWILL_CREDIT, CHARGE_REFUND, CHARGE_ADJUSTMENT, DOWN_PAYMENT,
-                    WAIVE_INTEREST, RECOVERY_REPAYMENT ->
-                handleRepayment(loanTransaction, currency, installments, charges);
-            case CHARGE_OFF -> handleChargeOff(loanTransaction, currency, installments);
-            case CHARGE_PAYMENT -> handleChargePayment(loanTransaction, currency, installments, charges);
-            // TODO: Cover rest of the transaction types
-            default -> {
-                log.warn("Unhandled transaction processing for transaction type: {}", loanTransaction.getTypeOf());
-            }
-        }
-    }
-
     private void handleDisbursement(LoanTransaction loanTransaction, MonetaryCurrency currency,
             List<LoanRepaymentScheduleInstallment> installments) {
         updateLoanSchedule(loanTransaction, currency, installments);
@@ -271,68 +335,44 @@ public class AdvancedPaymentScheduleTransactionProcessor extends AbstractLoanRep
         return loanTransactionToRepaymentScheduleMapping;
     }
 
-    private Money payAllocation(PaymentAllocationType paymentAllocationType, LoanRepaymentScheduleInstallment currentInstallment,
+    private Money processPaymentAllocation(PaymentAllocationType paymentAllocationType, LoanRepaymentScheduleInstallment currentInstallment,
             LoanTransaction loanTransaction, Money transactionAmountUnprocessed,
-            LoanTransactionToRepaymentScheduleMapping loanTransactionToRepaymentScheduleMapping, Balances balances) {
+            LoanTransactionToRepaymentScheduleMapping loanTransactionToRepaymentScheduleMapping, Balances balances,
+            LoanRepaymentScheduleInstallment.PaymentAction action) {
         LocalDate transactionDate = loanTransaction.getTransactionDate();
         Money zero = transactionAmountUnprocessed.zero();
         return switch (paymentAllocationType.getAllocationType()) {
             case PENALTY -> {
-                Money subPenaltyPortion = currentInstallment.payPenaltyChargesComponent(transactionDate, transactionAmountUnprocessed);
+                LoanRepaymentScheduleInstallment.PaymentFunction paymentFunction = currentInstallment
-                balances.setAggregatedPenaltyChargesPortion(balances.getAggregatedPenaltyChargesPortion().add(subPenaltyPortion));
+                        .getPaymentFunction(paymentAllocationType.getAllocationType(), action);
-                addToTransactionMapping(loanTransactionToRepaymentScheduleMapping, zero, zero, zero, subPenaltyPortion);
+                Money portion = paymentFunction.accept(transactionDate, transactionAmountUnprocessed);
-                yield subPenaltyPortion;
+                balances.setAggregatedPenaltyChargesPortion(balances.getAggregatedPenaltyChargesPortion().add(portion));
+                addToTransactionMapping(loanTransactionToRepaymentScheduleMapping, zero, zero, zero, portion);
+                yield portion;
             }
             case FEE -> {
-                Money subFeePortion = currentInstallment.payFeeChargesComponent(transactionDate, transactionAmountUnprocessed);
+                LoanRepaymentScheduleInstallment.PaymentFunction functional = currentInstallment
-                balances.setAggregatedFeeChargesPortion(balances.getAggregatedFeeChargesPortion().add(subFeePortion));
+                        .getPaymentFunction(paymentAllocationType.getAllocationType(), action);
-                addToTransactionMapping(loanTransactionToRepaymentScheduleMapping, zero, zero, subFeePortion, zero);
+                Money portion = functional.accept(transactionDate, transactionAmountUnprocessed);
-                yield subFeePortion;
+                balances.setAggregatedFeeChargesPortion(balances.getAggregatedFeeChargesPortion().add(portion));
+                addToTransactionMapping(loanTransactionToRepaymentScheduleMapping, zero, zero, portion, zero);
+                yield portion;
             }
             case INTEREST -> {
-                Money subInterestPortion = currentInstallment.payInterestComponent(transactionDate, transactionAmountUnprocessed);
+                LoanRepaymentScheduleInstallment.PaymentFunction functional = currentInstallment
-                balances.setAggregatedInterestPortion(balances.getAggregatedInterestPortion().add(subInterestPortion));
+                        .getPaymentFunction(paymentAllocationType.getAllocationType(), action);
-                addToTransactionMapping(loanTransactionToRepaymentScheduleMapping, zero, subInterestPortion, zero, zero);
+                Money portion = functional.accept(transactionDate, transactionAmountUnprocessed);
-                yield subInterestPortion;
+                balances.setAggregatedInterestPortion(balances.getAggregatedInterestPortion().add(portion));
+                addToTransactionMapping(loanTransactionToRepaymentScheduleMapping, zero, portion, zero, zero);
+                yield portion;
             }
             case PRINCIPAL -> {
-                Money subPrincipalPortion = currentInstallment.payPrincipalComponent(transactionDate, transactionAmountUnprocessed);
+                LoanRepaymentScheduleInstallment.PaymentFunction functional = currentInstallment
-                balances.setAggregatedPrincipalPortion(balances.getAggregatedPrincipalPortion().add(subPrincipalPortion));
+                        .getPaymentFunction(paymentAllocationType.getAllocationType(), action);
-                addToTransactionMapping(loanTransactionToRepaymentScheduleMapping, subPrincipalPortion, zero, zero, zero);
+                Money portion = functional.accept(transactionDate, transactionAmountUnprocessed);
-                yield subPrincipalPortion;
+                balances.setAggregatedPrincipalPortion(balances.getAggregatedPrincipalPortion().add(portion));
-            }
+                addToTransactionMapping(loanTransactionToRepaymentScheduleMapping, portion, zero, zero, zero);
-        };
+                yield portion;
-    }
-
-    private Money unpayAllocation(PaymentAllocationType paymentAllocationType, LoanRepaymentScheduleInstallment currentInstallment,
-            LoanTransaction loanTransaction, Money transactionAmountUnprocessed,
-            LoanTransactionToRepaymentScheduleMapping loanTransactionToRepaymentScheduleMapping, Balances balances) {
-        LocalDate transactionDate = loanTransaction.getTransactionDate();
-        Money zero = transactionAmountUnprocessed.zero();
-        return switch (paymentAllocationType.getAllocationType()) {
-            case PENALTY -> {
-                Money unpaidPenaltyPortion = currentInstallment.unpayPenaltyChargesComponent(transactionDate, transactionAmountUnprocessed);
-                balances.setAggregatedPenaltyChargesPortion(balances.getAggregatedPenaltyChargesPortion().minus(unpaidPenaltyPortion));
-                addToTransactionMapping(loanTransactionToRepaymentScheduleMapping, zero, zero, zero, unpaidPenaltyPortion);
-                yield unpaidPenaltyPortion;
-            }
-            case FEE -> {
-                Money unpaidFeePortion = currentInstallment.unpayFeeChargesComponent(transactionDate, transactionAmountUnprocessed);
-                balances.setAggregatedFeeChargesPortion(balances.getAggregatedFeeChargesPortion().minus(unpaidFeePortion));
-                addToTransactionMapping(loanTransactionToRepaymentScheduleMapping, zero, zero, unpaidFeePortion, zero);
-                yield unpaidFeePortion;
-            }
-            case INTEREST -> {
-                Money unpaidInterestPortion = currentInstallment.unpayInterestComponent(transactionDate, transactionAmountUnprocessed);
-                balances.setAggregatedInterestPortion(balances.getAggregatedInterestPortion().minus(unpaidInterestPortion));
-                addToTransactionMapping(loanTransactionToRepaymentScheduleMapping, zero, unpaidInterestPortion, zero, zero);
-                yield unpaidInterestPortion;
-            }
-            case PRINCIPAL -> {
-                Money unpaidPrincipalPortion = currentInstallment.unpayPrincipalComponent(transactionDate, transactionAmountUnprocessed);
-                balances.setAggregatedPrincipalPortion(balances.getAggregatedPrincipalPortion().minus(unpaidPrincipalPortion));
-                addToTransactionMapping(loanTransactionToRepaymentScheduleMapping, unpaidPrincipalPortion, zero, zero, zero);
-                yield unpaidPrincipalPortion;
             }
         };
     }
@@ -431,49 +471,6 @@ public class AdvancedPaymentScheduleTransactionProcessor extends AbstractLoanRep
         }
     }
 
-    @Override
-    protected void handleRefund(LoanTransaction loanTransaction, MonetaryCurrency currency,
-            List<LoanRepaymentScheduleInstallment> installments, Set<LoanCharge> charges) {
-        Money zero = Money.zero(currency);
-        List<LoanTransactionToRepaymentScheduleMapping> transactionMappings = new ArrayList<>();
-        Money transactionAmountUnprocessed = loanTransaction.getAmount(currency);
-
-        List<LoanPaymentAllocationRule> paymentAllocationRules = loanTransaction.getLoan().getPaymentAllocationRules();
-        LoanPaymentAllocationRule defaultPaymentAllocationRule = paymentAllocationRules.stream()
-                .filter(e -> PaymentAllocationTransactionType.DEFAULT.equals(e.getTransactionType())).findFirst().orElseThrow();
-        Optional<LoanPaymentAllocationRule> paymentAllocationRuleOptional = paymentAllocationRules.stream()
-                .filter(e -> loanTransaction.getTypeOf().equals(e.getTransactionType().getLoanTransactionType())).findFirst();
-        Balances balances = new Balances(zero, zero, zero, zero);
-        if (paymentAllocationRuleOptional.isPresent()) {
-            LoanPaymentAllocationRule paymentAllocationRule = paymentAllocationRuleOptional.get();
-            List<PaymentAllocationType> paymentAllocationTypes = paymentAllocationRule.getAllocationTypes();
-            FutureInstallmentAllocationRule futureInstallmentAllocationRule = paymentAllocationRule.getFutureInstallmentAllocationRule();
-            for (PaymentAllocationType paymentAllocationType : paymentAllocationTypes) {
-                transactionAmountUnprocessed = refundTransaction(loanTransaction, currency, installments, zero, transactionMappings,
-                        transactionAmountUnprocessed, futureInstallmentAllocationRule, balances, paymentAllocationType);
-                if (!transactionAmountUnprocessed.isGreaterThanZero()) {
-                    break;
-                }
-            }
-        } else {
-            // if the allocation rule is not defined then the reverse order of the default allocation rule will be used
-            LoanPaymentAllocationRule paymentAllocationRule = defaultPaymentAllocationRule;
-            List<PaymentAllocationType> paymentAllocationTypes = paymentAllocationRule.getAllocationTypes();
-            FutureInstallmentAllocationRule futureInstallmentAllocationRule = FutureInstallmentAllocationRule.LAST_INSTALLMENT;
-            for (int i = paymentAllocationTypes.size() - 1; i >= 0; i--) {
-                PaymentAllocationType paymentAllocationType = paymentAllocationTypes.get(i);
-                transactionAmountUnprocessed = refundTransaction(loanTransaction, currency, installments, zero, transactionMappings,
-                        transactionAmountUnprocessed, futureInstallmentAllocationRule, balances, paymentAllocationType);
-                if (!transactionAmountUnprocessed.isGreaterThanZero()) {
-                    break;
-                }
-            }
-        }
-        loanTransaction.updateComponents(balances.getAggregatedPrincipalPortion(), balances.getAggregatedInterestPortion(),
-                balances.getAggregatedFeeChargesPortion(), balances.getAggregatedPenaltyChargesPortion());
-        loanTransaction.updateLoanTransactionToRepaymentScheduleMappings(transactionMappings);
-    }
-
     private Money refundTransaction(LoanTransaction loanTransaction, MonetaryCurrency currency,
             List<LoanRepaymentScheduleInstallment> installments, Money zero,
             List<LoanTransactionToRepaymentScheduleMapping> transactionMappings, Money transactionAmountUnprocessed,
@@ -490,8 +487,9 @@ public class AdvancedPaymentScheduleTransactionProcessor extends AbstractLoanRep
                     if (currentInstallment != null) {
                         LoanTransactionToRepaymentScheduleMapping loanTransactionToRepaymentScheduleMapping = getTransactionMapping(
                                 transactionMappings, loanTransaction, currentInstallment, currency);
-                        refundedPortion = unpayAllocation(paymentAllocationType, currentInstallment, loanTransaction,
+                        refundedPortion = processPaymentAllocation(paymentAllocationType, currentInstallment, loanTransaction,
-                                transactionAmountUnprocessed, loanTransactionToRepaymentScheduleMapping, balances);
+                                transactionAmountUnprocessed, loanTransactionToRepaymentScheduleMapping, balances,
+                                LoanRepaymentScheduleInstallment.PaymentAction.UNPAY);
                         transactionAmountUnprocessed = transactionAmountUnprocessed.minus(refundedPortion);
                     }
                 }
@@ -502,8 +500,9 @@ public class AdvancedPaymentScheduleTransactionProcessor extends AbstractLoanRep
                     if (currentInstallment != null) {
                         LoanTransactionToRepaymentScheduleMapping loanTransactionToRepaymentScheduleMapping = getTransactionMapping(
                                 transactionMappings, loanTransaction, currentInstallment, currency);
-                        refundedPortion = unpayAllocation(paymentAllocationType, currentInstallment, loanTransaction,
+                        refundedPortion = processPaymentAllocation(paymentAllocationType, currentInstallment, loanTransaction,
-                                transactionAmountUnprocessed, loanTransactionToRepaymentScheduleMapping, balances);
+                                transactionAmountUnprocessed, loanTransactionToRepaymentScheduleMapping, balances,
+                                LoanRepaymentScheduleInstallment.PaymentAction.UNPAY);
                         transactionAmountUnprocessed = transactionAmountUnprocessed.minus(refundedPortion);
                     }
                 }
@@ -536,8 +535,9 @@ public class AdvancedPaymentScheduleTransactionProcessor extends AbstractLoanRep
                             }
                             LoanTransactionToRepaymentScheduleMapping loanTransactionToRepaymentScheduleMapping = getTransactionMapping(
                                     transactionMappings, loanTransaction, currentInstallment, currency);
-                            Money internalUnpaidPortion = unpayAllocation(paymentAllocationType, currentInstallment, loanTransaction,
+                            Money internalUnpaidPortion = processPaymentAllocation(paymentAllocationType, currentInstallment,
-                                    evenPortion, loanTransactionToRepaymentScheduleMapping, balances);
+                                    loanTransaction, evenPortion, loanTransactionToRepaymentScheduleMapping, balances,
+                                    LoanRepaymentScheduleInstallment.PaymentAction.UNPAY);
                             if (internalUnpaidPortion.isGreaterThanZero()) {
                                 refundedPortion = internalUnpaidPortion;
                             }
@@ -564,33 +564,163 @@ public class AdvancedPaymentScheduleTransactionProcessor extends AbstractLoanRep
                 .filter(e -> loanTransaction.getTypeOf().equals(e.getTransactionType().getLoanTransactionType())).findFirst()
                 .orElse(defaultPaymentAllocationRule);
         Balances balances = new Balances(zero, zero, zero, zero);
+
+        if (LoanScheduleProcessingType.HORIZONTAL
+                .equals(loanTransaction.getLoan().getLoanProductRelatedDetail().getLoanScheduleProcessingType())) {
+            transactionAmountUnprocessed = processPeriodsHorizontally(loanTransaction, currency, installments, transactionAmountUnprocessed,
+                    paymentAllocationRule, transactionMappings, balances);
+        } else if (LoanScheduleProcessingType.VERTICAL
+                .equals(loanTransaction.getLoan().getLoanProductRelatedDetail().getLoanScheduleProcessingType())) {
+            transactionAmountUnprocessed = processPeriodsVertically(loanTransaction, currency, installments, transactionAmountUnprocessed,
+                    paymentAllocationRule, transactionMappings, balances);
+        }
+        loanTransaction.updateComponents(balances.getAggregatedPrincipalPortion(), balances.getAggregatedInterestPortion(),
+                balances.getAggregatedFeeChargesPortion(), balances.getAggregatedPenaltyChargesPortion());
+        loanTransaction.updateLoanTransactionToRepaymentScheduleMappings(transactionMappings);
+
+        payAdditionalCharges(loanTransaction, currency, charges);
+
+        handleOverpayment(transactionAmountUnprocessed, loanTransaction);
+    }
+
+    private Money processPeriodsHorizontally(LoanTransaction loanTransaction, MonetaryCurrency currency,
+            List<LoanRepaymentScheduleInstallment> installments, Money transactionAmountUnprocessed,
+            LoanPaymentAllocationRule paymentAllocationRule, List<LoanTransactionToRepaymentScheduleMapping> transactionMappings,
+            Balances balances) {
+        LinkedHashMap<DueType, List<PaymentAllocationType>> paymentAllocationsMap = paymentAllocationRule.getAllocationTypes().stream()
+                .collect(Collectors.groupingBy(PaymentAllocationType::getDueType, LinkedHashMap::new,
+                        mapping(Function.identity(), toList())));
+
+        for (Map.Entry<DueType, List<PaymentAllocationType>> paymentAllocationsEntry : paymentAllocationsMap.entrySet()) {
+            transactionAmountUnprocessed = processAllocationsHorizontally(loanTransaction, currency, installments,
+                    transactionAmountUnprocessed, paymentAllocationsEntry.getValue(),
+                    paymentAllocationRule.getFutureInstallmentAllocationRule(), transactionMappings, balances);
+        }
+        return transactionAmountUnprocessed;
+    }
+
+    private Money processAllocationsHorizontally(LoanTransaction loanTransaction, MonetaryCurrency currency,
+            List<LoanRepaymentScheduleInstallment> installments, Money transactionAmountUnprocessed,
+            List<PaymentAllocationType> paymentAllocationTypes, FutureInstallmentAllocationRule futureInstallmentAllocationRule,
+            List<LoanTransactionToRepaymentScheduleMapping> transactionMappings, Balances balances) {
+        Money paidPortion;
+        boolean exit = false;
+        do {
+            LoanRepaymentScheduleInstallment oldestPastDueInstallment = installments.stream()
+                    .filter(LoanRepaymentScheduleInstallment::isNotFullyPaidOff).filter(e -> loanTransaction.isAfter(e.getDueDate()))
+                    .min(Comparator.comparing(LoanRepaymentScheduleInstallment::getInstallmentNumber)).orElse(null);
+            LoanRepaymentScheduleInstallment dueInstallment = installments.stream()
+                    .filter(LoanRepaymentScheduleInstallment::isNotFullyPaidOff).filter(e -> loanTransaction.isOn(e.getDueDate()))
+                    .min(Comparator.comparing(LoanRepaymentScheduleInstallment::getInstallmentNumber)).orElse(null);
+
+            // For having similar logic we are populating installment list even when the future installment
+            // allocation rule is NEXT_INSTALLMENT or LAST_INSTALLMENT hence the list has only one element.
+            List<LoanRepaymentScheduleInstallment> inAdvanceInstallments = new ArrayList<>();
+            if (FutureInstallmentAllocationRule.REAMORTIZATION.equals(futureInstallmentAllocationRule)) {
+                inAdvanceInstallments = installments.stream().filter(LoanRepaymentScheduleInstallment::isNotFullyPaidOff)
+                        .filter(e -> loanTransaction.isBefore(e.getDueDate())).toList();
+            } else if (FutureInstallmentAllocationRule.NEXT_INSTALLMENT.equals(futureInstallmentAllocationRule)) {
+                inAdvanceInstallments = installments.stream().filter(LoanRepaymentScheduleInstallment::isNotFullyPaidOff)
+                        .filter(e -> loanTransaction.isBefore(e.getDueDate()))
+                        .min(Comparator.comparing(LoanRepaymentScheduleInstallment::getInstallmentNumber)).stream().toList();
+            } else if (FutureInstallmentAllocationRule.LAST_INSTALLMENT.equals(futureInstallmentAllocationRule)) {
+                inAdvanceInstallments = installments.stream().filter(LoanRepaymentScheduleInstallment::isNotFullyPaidOff)
+                        .filter(e -> loanTransaction.isBefore(e.getDueDate()))
+                        .max(Comparator.comparing(LoanRepaymentScheduleInstallment::getInstallmentNumber)).stream().toList();
+            }
+
+            for (PaymentAllocationType paymentAllocationType : paymentAllocationTypes) {
+                switch (paymentAllocationType.getDueType()) {
+                    case PAST_DUE -> {
+                        if (oldestPastDueInstallment != null) {
+                            LoanTransactionToRepaymentScheduleMapping loanTransactionToRepaymentScheduleMapping = getTransactionMapping(
+                                    transactionMappings, loanTransaction, oldestPastDueInstallment, currency);
+                            paidPortion = processPaymentAllocation(paymentAllocationType, oldestPastDueInstallment, loanTransaction,
+                                    transactionAmountUnprocessed, loanTransactionToRepaymentScheduleMapping, balances,
+                                    LoanRepaymentScheduleInstallment.PaymentAction.PAY);
+                            transactionAmountUnprocessed = transactionAmountUnprocessed.minus(paidPortion);
+                        } else {
+                            exit = true;
+                        }
+                    }
+                    case DUE -> {
+                        if (dueInstallment != null) {
+                            LoanTransactionToRepaymentScheduleMapping loanTransactionToRepaymentScheduleMapping = getTransactionMapping(
+                                    transactionMappings, loanTransaction, dueInstallment, currency);
+                            paidPortion = processPaymentAllocation(paymentAllocationType, dueInstallment, loanTransaction,
+                                    transactionAmountUnprocessed, loanTransactionToRepaymentScheduleMapping, balances,
+                                    LoanRepaymentScheduleInstallment.PaymentAction.PAY);
+                            transactionAmountUnprocessed = transactionAmountUnprocessed.minus(paidPortion);
+                        } else {
+                            exit = true;
+                        }
+                    }
+                    case IN_ADVANCE -> {
+                        int numberOfInstallments = inAdvanceInstallments.size();
+                        if (numberOfInstallments > 0) {
+                            // This will be the same amount as transactionAmountUnprocessed in case of the future
+                            // installment allocation is NEXT_INSTALLMENT or LAST_INSTALLMENT
+                            Money evenPortion = transactionAmountUnprocessed.dividedBy(numberOfInstallments, MoneyHelper.getRoundingMode());
+                            // Adjustment might be needed due to the divide operation and the rounding mode
+                            Money balanceAdjustment = transactionAmountUnprocessed.minus(evenPortion.multipliedBy(numberOfInstallments));
+                            for (LoanRepaymentScheduleInstallment inAdvanceInstallment : inAdvanceInstallments) {
+                                // Adjust the portion for the last installment
+                                if (inAdvanceInstallment.equals(inAdvanceInstallments.get(numberOfInstallments - 1))) {
+                                    evenPortion = evenPortion.add(balanceAdjustment);
+                                }
+                                LoanTransactionToRepaymentScheduleMapping loanTransactionToRepaymentScheduleMapping = getTransactionMapping(
+                                        transactionMappings, loanTransaction, inAdvanceInstallment, currency);
+                                paidPortion = processPaymentAllocation(paymentAllocationType, inAdvanceInstallment, loanTransaction,
+                                        evenPortion, loanTransactionToRepaymentScheduleMapping, balances,
+                                        LoanRepaymentScheduleInstallment.PaymentAction.PAY);
+                                transactionAmountUnprocessed = transactionAmountUnprocessed.minus(paidPortion);
+                            }
+                        } else {
+                            exit = true;
+                        }
+                    }
+                }
+            }
+        }
+        // We are allocating till there is no pending installment or there is no more unprocessed transaction amount
+        // or there is no more outstanding balance of the allocation type
+        while (!exit && installments.stream().anyMatch(LoanRepaymentScheduleInstallment::isNotFullyPaidOff)
+                && transactionAmountUnprocessed.isGreaterThanZero());
+        return transactionAmountUnprocessed;
+    }
+
+    private Money processPeriodsVertically(LoanTransaction loanTransaction, MonetaryCurrency currency,
+            List<LoanRepaymentScheduleInstallment> installments, Money transactionAmountUnprocessed,
+            LoanPaymentAllocationRule paymentAllocationRule, List<LoanTransactionToRepaymentScheduleMapping> transactionMappings,
+            Balances balances) {
         for (PaymentAllocationType paymentAllocationType : paymentAllocationRule.getAllocationTypes()) {
             FutureInstallmentAllocationRule futureInstallmentAllocationRule = paymentAllocationRule.getFutureInstallmentAllocationRule();
             LoanRepaymentScheduleInstallment currentInstallment = null;
-            Money paidPortion = zero;
+            Money paidPortion = Money.zero(currency);
             do {
+                Predicate<LoanRepaymentScheduleInstallment> predicate = getFilterPredicate(paymentAllocationType, currency);
                 switch (paymentAllocationType.getDueType()) {
                     case PAST_DUE -> {
-                        currentInstallment = installments.stream().filter(LoanRepaymentScheduleInstallment::isNotFullyPaidOff)
+                        currentInstallment = installments.stream().filter(predicate).filter(e -> loanTransaction.isAfter(e.getDueDate()))
-                                .filter(e -> loanTransaction.isAfter(e.getDueDate()))
                                 .min(Comparator.comparing(LoanRepaymentScheduleInstallment::getInstallmentNumber)).orElse(null);
                         if (currentInstallment != null) {
                             LoanTransactionToRepaymentScheduleMapping loanTransactionToRepaymentScheduleMapping = getTransactionMapping(
                                     transactionMappings, loanTransaction, currentInstallment, currency);
-                            paidPortion = payAllocation(paymentAllocationType, currentInstallment, loanTransaction,
+                            paidPortion = processPaymentAllocation(paymentAllocationType, currentInstallment, loanTransaction,
-                                    transactionAmountUnprocessed, loanTransactionToRepaymentScheduleMapping, balances);
+                                    transactionAmountUnprocessed, loanTransactionToRepaymentScheduleMapping, balances,
+                                    LoanRepaymentScheduleInstallment.PaymentAction.PAY);
                             transactionAmountUnprocessed = transactionAmountUnprocessed.minus(paidPortion);
                         }
                     }
                     case DUE -> {
-                        currentInstallment = installments.stream().filter(LoanRepaymentScheduleInstallment::isNotFullyPaidOff)
+                        currentInstallment = installments.stream().filter(predicate).filter(e -> loanTransaction.isOn(e.getDueDate()))
-                                .filter(e -> loanTransaction.isOn(e.getDueDate()))
                                 .min(Comparator.comparing(LoanRepaymentScheduleInstallment::getInstallmentNumber)).orElse(null);
                         if (currentInstallment != null) {
                             LoanTransactionToRepaymentScheduleMapping loanTransactionToRepaymentScheduleMapping = getTransactionMapping(
                                     transactionMappings, loanTransaction, currentInstallment, currency);
-                            paidPortion = payAllocation(paymentAllocationType, currentInstallment, loanTransaction,
+                            paidPortion = processPaymentAllocation(paymentAllocationType, currentInstallment, loanTransaction,
-                                    transactionAmountUnprocessed, loanTransactionToRepaymentScheduleMapping, balances);
+                                    transactionAmountUnprocessed, loanTransactionToRepaymentScheduleMapping, balances,
+                                    LoanRepaymentScheduleInstallment.PaymentAction.PAY);
                             transactionAmountUnprocessed = transactionAmountUnprocessed.minus(paidPortion);
                         }
                     }
@@ -599,19 +729,19 @@ public class AdvancedPaymentScheduleTransactionProcessor extends AbstractLoanRep
                         // allocation rule is NEXT_INSTALLMENT or LAST_INSTALLMENT hence the list has only one element.
                         List<LoanRepaymentScheduleInstallment> currentInstallments = new ArrayList<>();
                         if (FutureInstallmentAllocationRule.REAMORTIZATION.equals(futureInstallmentAllocationRule)) {
-                            currentInstallments = installments.stream().filter(LoanRepaymentScheduleInstallment::isNotFullyPaidOff)
+                            currentInstallments = installments.stream().filter(predicate)
                                     .filter(e -> loanTransaction.isBefore(e.getDueDate())).toList();
                         } else if (FutureInstallmentAllocationRule.NEXT_INSTALLMENT.equals(futureInstallmentAllocationRule)) {
-                            currentInstallments = installments.stream().filter(LoanRepaymentScheduleInstallment::isNotFullyPaidOff)
+                            currentInstallments = installments.stream().filter(predicate)
                                     .filter(e -> loanTransaction.isBefore(e.getDueDate()))
                                     .min(Comparator.comparing(LoanRepaymentScheduleInstallment::getInstallmentNumber)).stream().toList();
                         } else if (FutureInstallmentAllocationRule.LAST_INSTALLMENT.equals(futureInstallmentAllocationRule)) {
-                            currentInstallments = installments.stream().filter(LoanRepaymentScheduleInstallment::isNotFullyPaidOff)
+                            currentInstallments = installments.stream().filter(predicate)
                                     .filter(e -> loanTransaction.isBefore(e.getDueDate()))
                                     .max(Comparator.comparing(LoanRepaymentScheduleInstallment::getInstallmentNumber)).stream().toList();
                         }
                         int numberOfInstallments = currentInstallments.size();
-                        paidPortion = zero;
+                        paidPortion = Money.zero(currency);
                         if (numberOfInstallments > 0) {
                             // This will be the same amount as transactionAmountUnprocessed in case of the future
                             // installment allocation is NEXT_INSTALLMENT or LAST_INSTALLMENT
@@ -626,8 +756,9 @@ public class AdvancedPaymentScheduleTransactionProcessor extends AbstractLoanRep
                                 }
                                 LoanTransactionToRepaymentScheduleMapping loanTransactionToRepaymentScheduleMapping = getTransactionMapping(
                                         transactionMappings, loanTransaction, currentInstallment, currency);
-                                Money internalPaidPortion = payAllocation(paymentAllocationType, currentInstallment, loanTransaction,
+                                Money internalPaidPortion = processPaymentAllocation(paymentAllocationType, currentInstallment,
-                                        evenPortion, loanTransactionToRepaymentScheduleMapping, balances);
+                                        loanTransaction, evenPortion, loanTransactionToRepaymentScheduleMapping, balances,
+                                        LoanRepaymentScheduleInstallment.PaymentAction.PAY);
                                 // Some extra logic to allocate as much as possible across the installments if the
                                 // outstanding balances are different
                                 if (internalPaidPortion.isGreaterThanZero()) {
@@ -644,15 +775,18 @@ public class AdvancedPaymentScheduleTransactionProcessor extends AbstractLoanRep
             // We are allocating till there is no pending installment or there is no more unprocessed transaction amount
             // or there is no more outstanding balance of the allocation type
             while (currentInstallment != null && transactionAmountUnprocessed.isGreaterThanZero() && paidPortion.isGreaterThanZero());
-
         }
-        loanTransaction.updateComponents(balances.getAggregatedPrincipalPortion(), balances.getAggregatedInterestPortion(),
+        return transactionAmountUnprocessed;
-                balances.getAggregatedFeeChargesPortion(), balances.getAggregatedPenaltyChargesPortion());
+    }
-        loanTransaction.updateLoanTransactionToRepaymentScheduleMappings(transactionMappings);
 
-        payAdditionalCharges(loanTransaction, currency, charges);
+    private Predicate<LoanRepaymentScheduleInstallment> getFilterPredicate(PaymentAllocationType paymentAllocationType,
-
+            MonetaryCurrency currency) {
-        handleOverpayment(transactionAmountUnprocessed, loanTransaction);
+        return switch (paymentAllocationType.getAllocationType()) {
+            case PENALTY -> (p) -> p.getPenaltyChargesOutstanding(currency).isGreaterThanZero();
+            case FEE -> (p) -> p.getFeeChargesOutstanding(currency).isGreaterThanZero();
+            case INTEREST -> (p) -> p.getInterestOutstanding(currency).isGreaterThanZero();
+            case PRINCIPAL -> (p) -> p.getPrincipalOutstanding(currency).isGreaterThanZero();
+        };
     }
 
     private void payAdditionalCharges(LoanTransaction loanTransaction, MonetaryCurrency currency, Set<LoanCharge> charges) {

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/impl/CreocoreLoanRepaymentScheduleTransactionProcessor.java

@@ -42,9 +42,9 @@ import org.apache.fineract.portfolio.loanaccount.domain.transactionprocessor.Loa
  */
 public class CreocoreLoanRepaymentScheduleTransactionProcessor extends AbstractLoanRepaymentScheduleTransactionProcessor {
 
-    private static final String STRATEGY_CODE = "creocore-strategy";
+    public static final String STRATEGY_CODE = "creocore-strategy";
 
-    private static final String STRATEGY_NAME = "Creocore Unique";
+    public static final String STRATEGY_NAME = "Creocore Unique";
 
     @Override
     public String getCode() {

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/impl/DuePenFeeIntPriInAdvancePriPenFeeIntLoanRepaymentScheduleTransactionProcessor.java

@@ -43,9 +43,9 @@ import org.apache.fineract.portfolio.loanaccount.domain.transactionprocessor.Loa
 public class DuePenFeeIntPriInAdvancePriPenFeeIntLoanRepaymentScheduleTransactionProcessor
         extends AbstractLoanRepaymentScheduleTransactionProcessor {
 
-    private static final String STRATEGY_CODE = "due-penalty-fee-interest-principal-in-advance-principal-penalty-fee-interest-strategy";
+    public static final String STRATEGY_CODE = "due-penalty-fee-interest-principal-in-advance-principal-penalty-fee-interest-strategy";
 
-    private static final String STRATEGY_NAME = "Due penalty, fee, interest, principal, In advance principal, penalty, fee, interest";
+    public static final String STRATEGY_NAME = "Due penalty, fee, interest, principal, In advance principal, penalty, fee, interest";
 
     @Override
     public String getCode() {

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/impl/DuePenIntPriFeeInAdvancePenIntPriFeeLoanRepaymentScheduleTransactionProcessor.java

@@ -43,9 +43,9 @@ import org.apache.fineract.portfolio.loanaccount.domain.transactionprocessor.Loa
 public class DuePenIntPriFeeInAdvancePenIntPriFeeLoanRepaymentScheduleTransactionProcessor
         extends AbstractLoanRepaymentScheduleTransactionProcessor {
 
-    private static final String STRATEGY_CODE = "due-penalty-interest-principal-fee-in-advance-penalty-interest-principal-fee-strategy";
+    public static final String STRATEGY_CODE = "due-penalty-interest-principal-fee-in-advance-penalty-interest-principal-fee-strategy";
 
-    private static final String STRATEGY_NAME = "Due penalty, interest, principal, fee, In advance penalty, interest, principal, fee";
+    public static final String STRATEGY_NAME = "Due penalty, interest, principal, fee, In advance penalty, interest, principal, fee";
 
     @Override
     public String getCode() {

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/impl/EarlyPaymentLoanRepaymentScheduleTransactionProcessor.java

@@ -38,7 +38,7 @@ public class EarlyPaymentLoanRepaymentScheduleTransactionProcessor extends Abstr
 
     public static final String STRATEGY_CODE = "early-repayment-strategy";
 
-    private static final String STRATEGY_NAME = "Early Repayment Strategy";
+    public static final String STRATEGY_NAME = "Early Repayment Strategy";
 
     @Override
     public String getCode() {

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/impl/FineractStyleLoanRepaymentScheduleTransactionProcessor.java

@@ -42,9 +42,9 @@ import org.apache.fineract.portfolio.loanaccount.domain.transactionprocessor.Loa
 @SuppressWarnings("unused")
 public class FineractStyleLoanRepaymentScheduleTransactionProcessor extends AbstractLoanRepaymentScheduleTransactionProcessor {
 
-    private static final String STRATEGY_CODE = "mifos-standard-strategy";
+    public static final String STRATEGY_CODE = "mifos-standard-strategy";
 
-    private static final String STRATEGY_NAME = "Penalties, Fees, Interest, Principal order";
+    public static final String STRATEGY_NAME = "Penalties, Fees, Interest, Principal order";
 
     @Override
     public String getCode() {

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/impl/HeavensFamilyLoanRepaymentScheduleTransactionProcessor.java

@@ -44,9 +44,9 @@ import org.apache.fineract.portfolio.loanaccount.domain.transactionprocessor.Loa
 @SuppressWarnings("unused")
 public class HeavensFamilyLoanRepaymentScheduleTransactionProcessor extends AbstractLoanRepaymentScheduleTransactionProcessor {
 
-    private static final String STRATEGY_CODE = "heavensfamily-strategy";
+    public static final String STRATEGY_CODE = "heavensfamily-strategy";
 
-    private static final String STRATEGY_NAME = "HeavensFamily Unique";
+    public static final String STRATEGY_NAME = "HeavensFamily Unique";
 
     @Override
     public String getCode() {

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/impl/InterestPrincipalPenaltyFeesOrderLoanRepaymentScheduleTransactionProcessor.java

@@ -37,9 +37,9 @@ import org.apache.fineract.portfolio.loanaccount.domain.transactionprocessor.Loa
 public class InterestPrincipalPenaltyFeesOrderLoanRepaymentScheduleTransactionProcessor
         extends AbstractLoanRepaymentScheduleTransactionProcessor {
 
-    private static final String STRATEGY_CODE = "interest-principal-penalties-fees-order-strategy";
+    public static final String STRATEGY_CODE = "interest-principal-penalties-fees-order-strategy";
 
-    private static final String STRATEGY_NAME = "Interest, Principal, Penalties, Fees Order";
+    public static final String STRATEGY_NAME = "Interest, Principal, Penalties, Fees Order";
 
     @Override
     public String getCode() {

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/impl/PrincipalInterestPenaltyFeesOrderLoanRepaymentScheduleTransactionProcessor.java

@@ -37,9 +37,9 @@ import org.apache.fineract.portfolio.loanaccount.domain.transactionprocessor.Loa
 public class PrincipalInterestPenaltyFeesOrderLoanRepaymentScheduleTransactionProcessor
         extends AbstractLoanRepaymentScheduleTransactionProcessor {
 
-    private static final String STRATEGY_CODE = "principal-interest-penalties-fees-order-strategy";
+    public static final String STRATEGY_CODE = "principal-interest-penalties-fees-order-strategy";
 
-    private static final String STRATEGY_NAME = "Principal, Interest, Penalties, Fees Order";
+    public static final String STRATEGY_NAME = "Principal, Interest, Penalties, Fees Order";
 
     @Override
     public String getCode() {

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/impl/RBILoanRepaymentScheduleTransactionProcessor.java

@@ -46,9 +46,9 @@ import org.apache.fineract.portfolio.loanaccount.domain.transactionprocessor.Loa
  */
 public class RBILoanRepaymentScheduleTransactionProcessor extends AbstractLoanRepaymentScheduleTransactionProcessor {
 
-    private static final String STRATEGY_CODE = "rbi-india-strategy";
+    public static final String STRATEGY_CODE = "rbi-india-strategy";
 
-    private static final String STRATEGY_NAME = "Overdue/Due Fee/Int,Principal";
+    public static final String STRATEGY_NAME = "Overdue/Due Fee/Int,Principal";
 
     @Override
     public String getCode() {

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/LoanApplicationTerms.java

@@ -219,6 +219,7 @@ public final class LoanApplicationTerms {
     private boolean isScheduleExtensionForDownPaymentDisabled;
     private Money disbursedPrincipal;
     private final LoanScheduleType loanScheduleType;
+    private final LoanScheduleProcessingType loanScheduleProcessingType;
 
     public static LoanApplicationTerms assembleFrom(final ApplicationCurrency currency, final Integer loanTermFrequency,
             final PeriodFrequencyType loanTermPeriodFrequencyType, final Integer numberOfRepayments, final Integer repaymentEvery,
@@ -246,7 +247,7 @@ public final class LoanApplicationTerms {
             final Boolean enableDownPayment, final BigDecimal disbursedAmountPercentageForDownPayment,
             final Boolean isAutoRepaymentForDownPaymentEnabled, final RepaymentStartDateType repaymentStartDateType,
             final LocalDate submittedOnDate, final Boolean isScheduleExtensionForDownPaymentDisabled,
-            final LoanScheduleType loanScheduleType) {
+            final LoanScheduleType loanScheduleType, final LoanScheduleProcessingType loanScheduleProcessingType) {
 
         final LoanRescheduleStrategyMethod rescheduleStrategyMethod = null;
         final CalendarHistoryDataWrapper calendarHistoryDataWrapper = null;
@@ -265,7 +266,7 @@ public final class LoanApplicationTerms {
                 isInterestToBeRecoveredFirstWhenGreaterThanEMI, fixedPrincipalPercentagePerInstallment,
                 isPrincipalCompoundingDisabledForOverdueLoans, enableDownPayment, disbursedAmountPercentageForDownPayment,
                 isAutoRepaymentForDownPaymentEnabled, repaymentStartDateType, submittedOnDate, isScheduleExtensionForDownPaymentDisabled,
-                loanScheduleType);
+                loanScheduleType, loanScheduleProcessingType);
 
     }
 
@@ -322,6 +323,7 @@ public final class LoanApplicationTerms {
             isScheduleExtensionForDownPaymentDisabled = loanProductRelatedDetail.isDisableScheduleExtensionForDownPayment();
         }
         LoanScheduleType loanScheduleType = loanProductRelatedDetail.getLoanScheduleType();
+        LoanScheduleProcessingType loanScheduleProcessingType = loanProductRelatedDetail.getLoanScheduleProcessingType();
         return new LoanApplicationTerms(applicationCurrency, loanTermFrequency, loanTermPeriodFrequencyType, numberOfRepayments,
                 repaymentEvery, repaymentPeriodFrequencyType, ((nthDay != null) ? nthDay.getValue() : null), dayOfWeek, amortizationMethod,
                 interestMethod, interestRatePerPeriod, interestRatePeriodFrequencyType, annualNominalInterestRate,
@@ -338,7 +340,7 @@ public final class LoanApplicationTerms {
                 isInterestToBeRecoveredFirstWhenGreaterThanEMI, fixedPrincipalPercentagePerInstallment,
                 isPrincipalCompoundingDisabledForOverdueLoans, isDownPaymentEnabled, disbursedAmountPercentageForDownPayment,
                 isAutoRepaymentForDownPaymentEnabled, repaymentStartDateType, submittedOnDate, isScheduleExtensionForDownPaymentDisabled,
-                loanScheduleType);
+                loanScheduleType, loanScheduleProcessingType);
     }
 
     private LoanApplicationTerms(final ApplicationCurrency currency, final Integer loanTermFrequency,
@@ -367,7 +369,8 @@ public final class LoanApplicationTerms {
             final boolean isPrincipalCompoundingDisabledForOverdueLoans, final boolean isDownPaymentEnabled,
             final BigDecimal disbursedAmountPercentageForDownPayment, final boolean isAutoRepaymentForDownPaymentEnabled,
             final RepaymentStartDateType repaymentStartDateType, final LocalDate submittedOnDate,
-            final boolean isScheduleExtensionForDownPaymentDisabled, final LoanScheduleType loanScheduleType) {
+            final boolean isScheduleExtensionForDownPaymentDisabled, final LoanScheduleType loanScheduleType,
+            final LoanScheduleProcessingType loanScheduleProcessingType) {
 
         this.currency = currency;
         this.loanTermFrequency = loanTermFrequency;
@@ -452,6 +455,7 @@ public final class LoanApplicationTerms {
         this.submittedOnDate = submittedOnDate;
         this.isScheduleExtensionForDownPaymentDisabled = isScheduleExtensionForDownPaymentDisabled;
         this.loanScheduleType = loanScheduleType;
+        this.loanScheduleProcessingType = loanScheduleProcessingType;
     }
 
     public Money adjustPrincipalIfLastRepaymentPeriod(final Money principalForPeriod, final Money totalCumulativePrincipalToDate,
@@ -1295,7 +1299,7 @@ public final class LoanApplicationTerms {
                 this.graceOnArrearsAgeing, this.daysInMonthType.getValue(), this.daysInYearType.getValue(),
                 this.interestRecalculationEnabled, this.isEqualAmortization, this.isDownPaymentEnabled,
                 this.disbursedAmountPercentageForDownPayment, this.isAutoRepaymentForDownPaymentEnabled,
-                this.isScheduleExtensionForDownPaymentDisabled, this.loanScheduleType);
+                this.isScheduleExtensionForDownPaymentDisabled, this.loanScheduleType, this.loanScheduleProcessingType);
     }
 
     public Integer getLoanTermFrequency() {

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/LoanScheduleProcessingType.java

@@ -0,0 +1,42 @@
+/**
+ * Licensed to the Apache Software Foundation (ASF) under one
+ * or more contributor license agreements. See the NOTICE file
+ * distributed with this work for additional information
+ * regarding copyright ownership. The ASF licenses this file
+ * to you under the Apache License, Version 2.0 (the
+ * "License"); you may not use this file except in compliance
+ * with the License. You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing,
+ * software distributed under the License is distributed on an
+ * "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+ * KIND, either express or implied. See the License for the
+ * specific language governing permissions and limitations
+ * under the License.
+ */
+package org.apache.fineract.portfolio.loanaccount.loanschedule.domain;
+
+import java.util.Arrays;
+import java.util.List;
+import lombok.Getter;
+import lombok.RequiredArgsConstructor;
+import org.apache.fineract.infrastructure.core.data.EnumOptionData;
+
+@Getter
+@RequiredArgsConstructor
+public enum LoanScheduleProcessingType {
+
+    HORIZONTAL("Horizontal"), VERTICAL("Vertical");
+
+    private final String humanReadableName;
+
+    public static List<EnumOptionData> getValuesAsEnumOptionDataList() {
+        return Arrays.stream(values()).map(v -> new EnumOptionData((long) (v.ordinal() + 1), v.name(), v.getHumanReadableName())).toList();
+    }
+
+    public EnumOptionData asEnumOptionData() {
+        return new EnumOptionData((long) this.ordinal(), this.name(), this.humanReadableName);
+    }
+}

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/LoanScheduleType.java

@@ -18,6 +18,25 @@
  */
 package org.apache.fineract.portfolio.loanaccount.loanschedule.domain;
 
+import java.util.Arrays;
+import java.util.List;
+import lombok.Getter;
+import lombok.RequiredArgsConstructor;
+import org.apache.fineract.infrastructure.core.data.EnumOptionData;
+
+@Getter
+@RequiredArgsConstructor
 public enum LoanScheduleType {
-    CUMULATIVE, PROGRESSIVE
+
+    CUMULATIVE("Cumulative"), PROGRESSIVE("Progressive");
+
+    private final String humanReadableName;
+
+    public static List<EnumOptionData> getValuesAsEnumOptionDataList() {
+        return Arrays.stream(values()).map(v -> new EnumOptionData((long) (v.ordinal() + 1), v.name(), v.getHumanReadableName())).toList();
+    }
+
+    public EnumOptionData asEnumOptionData() {
+        return new EnumOptionData((long) this.ordinal(), this.name(), this.humanReadableName);
+    }
 }

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanproduct/LoanProductConstants.java

@@ -158,5 +158,6 @@ public interface LoanProductConstants {
 
     // loan schedule type
     String LOAN_SCHEDULE_TYPE = "loanScheduleType";
+    String LOAN_SCHEDULE_PROCESSING_TYPE = "loanScheduleProcessingType";
 
 }

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanproduct/domain/AdvancedPaymentAllocationsValidator.java

@@ -20,6 +20,7 @@ package org.apache.fineract.portfolio.loanproduct.domain;
 
 import java.util.Arrays;
 import java.util.List;
+import java.util.concurrent.atomic.AtomicInteger;
 import java.util.stream.IntStream;
 import org.apache.commons.lang3.tuple.Pair;
 import org.apache.fineract.infrastructure.core.data.ApiParameterError;
@@ -72,6 +73,34 @@ public class AdvancedPaymentAllocationsValidator {
         }
     }
 
+    public void checkGroupingOfAllocationRules(List<LoanProductPaymentAllocationRule> loanProductPaymentAllocationRules) {
+        loanProductPaymentAllocationRules.forEach(paymentAllocationRule -> {
+            AtomicInteger pastDueRuleInteger = new AtomicInteger();
+            AtomicInteger dueRuleInteger = new AtomicInteger();
+            AtomicInteger inAdvanceRuleInteger = new AtomicInteger();
+            paymentAllocationRule.getAllocationTypes().forEach(paymentAllocationType -> {
+                validateAllocationType(paymentAllocationType, pastDueRuleInteger, dueRuleInteger, inAdvanceRuleInteger);
+            });
+        });
+    }
+
+    private void validateAllocationType(PaymentAllocationType paymentAllocationType, AtomicInteger pastDueRuleInteger,
+            AtomicInteger dueRuleInteger, AtomicInteger inAdvanceRuleInteger) {
+        switch (paymentAllocationType.getDueType()) {
+            case PAST_DUE -> validateDueType(pastDueRuleInteger, dueRuleInteger, inAdvanceRuleInteger);
+            case DUE -> validateDueType(dueRuleInteger, pastDueRuleInteger, inAdvanceRuleInteger);
+            case IN_ADVANCE -> validateDueType(inAdvanceRuleInteger, pastDueRuleInteger, dueRuleInteger);
+        }
+    }
+
+    private void validateDueType(AtomicInteger currentRuleInteger, AtomicInteger otherRule1Integer, AtomicInteger otherRule2Integer) {
+        currentRuleInteger.incrementAndGet();
+        if ((otherRule1Integer.get() > 0 && otherRule1Integer.get() < 4) || (otherRule2Integer.get() > 0 && otherRule2Integer.get() < 4)) {
+            raiseValidationError("mixed.due.type.allocation.rules.are.not.supported.with.horizontal.installment.processing",
+                    "Horizontal repayment schedule processing is not supporting mixed due type allocation rules!");
+        }
+    }
+
     private boolean hasDuplicateTransactionTypes(List<LoanProductPaymentAllocationRule> rules) {
         return rules != null
                 && rules.stream().map(LoanProductPaymentAllocationRule::getTransactionType).distinct().toList().size() != rules.size();

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanproduct/domain/LoanProduct.java

@@ -62,6 +62,7 @@ import org.apache.fineract.portfolio.floatingrates.data.FloatingRatePeriodData;
 import org.apache.fineract.portfolio.floatingrates.domain.FloatingRate;
 import org.apache.fineract.portfolio.fund.domain.Fund;
 import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.AprCalculator;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleProcessingType;
 import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleType;
 import org.apache.fineract.portfolio.loanproduct.LoanProductConstants;
 import org.apache.fineract.portfolio.loanproduct.exception.LoanProductGeneralRuleException;
@@ -312,6 +313,15 @@ public class LoanProduct extends AbstractPersistableCustom {
             loanScheduleType = LoanScheduleType.CUMULATIVE;
         }
 
+        final LoanScheduleProcessingType loanScheduleProcessingType;
+        if (LoanScheduleType.PROGRESSIVE.equals(loanScheduleType) && command.hasParameter("loanScheduleProcessingType")) {
+            loanScheduleProcessingType = LoanScheduleProcessingType
+                    .valueOf(command.stringValueOfParameterNamed("loanScheduleProcessingType"));
+        } else {
+            // For backward compatibility
+            loanScheduleProcessingType = LoanScheduleProcessingType.HORIZONTAL;
+        }
+
         final boolean useBorrowerCycle = command
                 .booleanPrimitiveValueOfParameterNamed(LoanProductConstants.USE_BORROWER_CYCLE_PARAMETER_NAME);
         final Set<LoanProductBorrowerCycleVariations> loanProductBorrowerCycleVariations = new HashSet<>();
@@ -436,7 +446,7 @@ public class LoanProduct extends AbstractPersistableCustom {
                 disallowExpectedDisbursements, allowApprovedDisbursedAmountsOverApplied, overAppliedCalculationType, overAppliedNumber,
                 dueDaysForRepaymentEvent, overDueDaysForRepaymentEvent, enableDownPayment, disbursedAmountPercentageDownPayment,
                 enableAutoRepaymentForDownPayment, repaymentStartDateType, disableScheduleExtensionForDownPayment,
-                enableInstallmentLevelDelinquency, loanScheduleType);
+                enableInstallmentLevelDelinquency, loanScheduleType, loanScheduleProcessingType);
 
     }
 
@@ -652,7 +662,7 @@ public class LoanProduct extends AbstractPersistableCustom {
             final boolean enableDownPayment, final BigDecimal disbursedAmountPercentageForDownPayment,
             final boolean enableAutoRepaymentForDownPayment, final RepaymentStartDateType repaymentStartDateType,
             final boolean disableScheduleExtensionForDownPayment, final boolean enableInstallmentLevelDelinquency,
-            final LoanScheduleType loanScheduleType) {
+            final LoanScheduleType loanScheduleType, final LoanScheduleProcessingType loanScheduleProcessingType) {
         this.fund = fund;
         this.transactionProcessingStrategyCode = transactionProcessingStrategyCode;
 
@@ -694,7 +704,7 @@ public class LoanProduct extends AbstractPersistableCustom {
                 recurringMoratoriumOnPrincipalPeriods, graceOnInterestPayment, graceOnInterestCharged, amortizationMethod,
                 inArrearsTolerance, graceOnArrearsAgeing, daysInMonthType.getValue(), daysInYearType.getValue(),
                 isInterestRecalculationEnabled, isEqualAmortization, enableDownPayment, disbursedAmountPercentageForDownPayment,
-                enableAutoRepaymentForDownPayment, disableScheduleExtensionForDownPayment, loanScheduleType);
+                enableAutoRepaymentForDownPayment, disableScheduleExtensionForDownPayment, loanScheduleType, loanScheduleProcessingType);
 
         this.loanProductRelatedDetail.validateRepaymentPeriodWithGraceSettings();
 

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanproduct/domain/LoanProductRelatedDetail.java

@@ -39,6 +39,7 @@ import org.apache.fineract.portfolio.common.domain.DaysInYearType;
 import org.apache.fineract.portfolio.common.domain.PeriodFrequencyType;
 import org.apache.fineract.portfolio.loanaccount.domain.Loan;
 import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.AprCalculator;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleProcessingType;
 import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleType;
 import org.apache.fineract.portfolio.loanproduct.LoanProductConstants;
 
@@ -146,6 +147,10 @@ public class LoanProductRelatedDetail implements LoanProductMinimumRepaymentSche
     @Enumerated(EnumType.STRING)
     private LoanScheduleType loanScheduleType;
 
+    @Column(name = "loan_schedule_processing_type", nullable = false)
+    @Enumerated(EnumType.STRING)
+    private LoanScheduleProcessingType loanScheduleProcessingType;
+
     public static LoanProductRelatedDetail createFrom(final MonetaryCurrency currency, final BigDecimal principal,
             final BigDecimal nominalInterestRatePerPeriod, final PeriodFrequencyType interestRatePeriodFrequencyType,
             final BigDecimal nominalAnnualInterestRate, final InterestMethod interestMethod,
@@ -157,7 +162,7 @@ public class LoanProductRelatedDetail implements LoanProductMinimumRepaymentSche
             final Integer daysInYearType, final boolean isInterestRecalculationEnabled, final boolean isEqualAmortization,
             final boolean enableDownPayment, final BigDecimal disbursedAmountPercentageForDownPayment,
             final boolean enableAutoRepaymentForDownPayment, final boolean disableScheduleExtensionForDownPayment,
-            final LoanScheduleType loanScheduleType) {
+            final LoanScheduleType loanScheduleType, final LoanScheduleProcessingType loanScheduleProcessingType) {
 
         return new LoanProductRelatedDetail(currency, principal, nominalInterestRatePerPeriod, interestRatePeriodFrequencyType,
                 nominalAnnualInterestRate, interestMethod, interestCalculationPeriodMethod, allowPartialPeriodInterestCalcualtion,
@@ -165,7 +170,7 @@ public class LoanProductRelatedDetail implements LoanProductMinimumRepaymentSche
                 recurringMoratoriumOnPrincipalPeriods, graceOnInterestPayment, graceOnInterestCharged, amortizationMethod,
                 inArrearsTolerance, graceOnArrearsAgeing, daysInMonthType, daysInYearType, isInterestRecalculationEnabled,
                 isEqualAmortization, enableDownPayment, disbursedAmountPercentageForDownPayment, enableAutoRepaymentForDownPayment,
-                disableScheduleExtensionForDownPayment, loanScheduleType);
+                disableScheduleExtensionForDownPayment, loanScheduleType, loanScheduleProcessingType);
     }
 
     protected LoanProductRelatedDetail() {
@@ -183,7 +188,7 @@ public class LoanProductRelatedDetail implements LoanProductMinimumRepaymentSche
             final Integer daysInYearType, final boolean isInterestRecalculationEnabled, final boolean isEqualAmortization,
             final boolean enableDownPayment, final BigDecimal disbursedAmountPercentageForDownPayment,
             final boolean enableAutoRepaymentForDownPayment, final boolean disableScheduleExtensionForDownPayment,
-            final LoanScheduleType loanScheduleType) {
+            final LoanScheduleType loanScheduleType, final LoanScheduleProcessingType loanScheduleProcessingType) {
         this.currency = currency;
         this.principal = defaultPrincipal;
         this.nominalInterestRatePerPeriod = defaultNominalInterestRatePerPeriod;
@@ -215,6 +220,7 @@ public class LoanProductRelatedDetail implements LoanProductMinimumRepaymentSche
         this.enableAutoRepaymentForDownPayment = enableAutoRepaymentForDownPayment;
         this.disableScheduleExtensionForDownPayment = disableScheduleExtensionForDownPayment;
         this.loanScheduleType = loanScheduleType;
+        this.loanScheduleProcessingType = loanScheduleProcessingType;
     }
 
     private Integer defaultToNullIfZero(final Integer value) {
@@ -740,4 +746,8 @@ public class LoanProductRelatedDetail implements LoanProductMinimumRepaymentSche
     public LoanScheduleType getLoanScheduleType() {
         return loanScheduleType;
     }
+
+    public LoanScheduleProcessingType getLoanScheduleProcessingType() {
+        return loanScheduleProcessingType;
+    }
 }

fineract-loan/src/main/resources/db/changelog/tenant/module/loan/module-changelog-master.xml

@@ -34,4 +34,5 @@
   <include relativeToChangelogFile="true" file="parts/1009_refactor_loan_Installment_delinquency_tag.xml"/>
   <include relativeToChangelogFile="true" file="parts/1010_introduce_loan_schedule_type_configuration.xml"/>
   <include relativeToChangelogFile="true" file="parts/1011_add_delinquency_actions_table.xml"/>
+  <include relativeToChangelogFile="true" file="parts/1012_introduce_loan_schedule_processing_type_configuration.xml"/>
 </databaseChangeLog>

fineract-loan/src/main/resources/db/changelog/tenant/module/loan/parts/1012_introduce_loan_schedule_processing_type_configuration.xml

@@ -0,0 +1,37 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<!--
+
+    Licensed to the Apache Software Foundation (ASF) under one
+    or more contributor license agreements. See the NOTICE file
+    distributed with this work for additional information
+    regarding copyright ownership. The ASF licenses this file
+    to you under the Apache License, Version 2.0 (the
+    "License"); you may not use this file except in compliance
+    with the License. You may obtain a copy of the License at
+
+    http://www.apache.org/licenses/LICENSE-2.0
+
+    Unless required by applicable law or agreed to in writing,
+    software distributed under the License is distributed on an
+    "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+    KIND, either express or implied. See the License for the
+    specific language governing permissions and limitations
+    under the License.
+
+-->
+<databaseChangeLog xmlns="http://www.liquibase.org/xml/ns/dbchangelog"
+                   xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance"
+                   xsi:schemaLocation="http://www.liquibase.org/xml/ns/dbchangelog http://www.liquibase.org/xml/ns/dbchangelog/dbchangelog-4.1.xsd">
+    <changeSet author="fineract" id="1">
+        <addColumn tableName="m_product_loan">
+            <column defaultValue="HORIZONTAL" type="varchar(20)" name="loan_schedule_processing_type">
+                <constraints nullable="false"/>
+            </column>
+        </addColumn>
+        <addColumn tableName="m_loan">
+            <column defaultValue="HORIZONTAL" type="varchar(20)" name="loan_schedule_processing_type">
+                <constraints nullable="false"/>
+            </column>
+        </addColumn>
+    </changeSet>
+</databaseChangeLog>

fineract-loan/src/test/java/org/apache/fineract/portfolio/loanproduct/domain/AdvancedPaymentAllocationsValidatorTest.java

@@ -143,11 +143,37 @@ class AdvancedPaymentAllocationsValidatorTest {
                 () -> underTest.validate(List.of(lppr1, lppr2), ADVANCED_PAYMENT_ALLOCATION_STRATEGY));
     }
 
+    @Test
+    public void checkGroupingOfAllocationRulesGoodOrder() {
+        List<LoanProductPaymentAllocationRule> allocationRules1 = List.of(createLoanProductAllocationRule1());
+        Assertions.assertDoesNotThrow(() -> underTest.checkGroupingOfAllocationRules(allocationRules1));
+
+        List<LoanProductPaymentAllocationRule> allocationRules2 = List.of(createLoanProductAllocationRule4());
+        Assertions.assertDoesNotThrow(() -> underTest.checkGroupingOfAllocationRules(allocationRules2));
+    }
+
+    @Test
+    public void checkGroupingOfAllocationRulesWrongOrder() {
+        List<LoanProductPaymentAllocationRule> allocationRules = List.of(createLoanProductAllocationRule3());
+        assertPlatformValidationException("Horizontal repayment schedule processing is not supporting mixed due type allocation rules!",
+                "mixed.due.type.allocation.rules.are.not.supported.with.horizontal.installment.processing",
+                () -> underTest.checkGroupingOfAllocationRules(allocationRules));
+    }
+
     private void assertPlatformValidationException(String message, String code, Executable executable) {
         PlatformApiDataValidationException validationException = assertThrows(PlatformApiDataValidationException.class, executable);
         assertPlatformException(message, code, validationException);
     }
 
+    @NotNull
+    private static LoanProductPaymentAllocationRule createLoanProductAllocationRule1() {
+        LoanProductPaymentAllocationRule lppr1 = new LoanProductPaymentAllocationRule();
+        lppr1.setTransactionType(DEFAULT);
+        lppr1.setFutureInstallmentAllocationRule(LAST_INSTALLMENT);
+        lppr1.setAllocationTypes(EnumSet.allOf(PaymentAllocationType.class).stream().toList());
+        return lppr1;
+    }
+
     @NotNull
     private static LoanProductPaymentAllocationRule createLoanProductAllocationRule2() {
         LoanProductPaymentAllocationRule lppr2 = new LoanProductPaymentAllocationRule();
@@ -160,20 +186,36 @@ class AdvancedPaymentAllocationsValidatorTest {
     }
 
     @NotNull
-    private static LoanProductPaymentAllocationRule createLoanProductAllocationRule1() {
+    private static LoanProductPaymentAllocationRule createLoanProductAllocationRule3() {
-        LoanProductPaymentAllocationRule lppr1 = new LoanProductPaymentAllocationRule();
+        LoanProductPaymentAllocationRule lppr = new LoanProductPaymentAllocationRule();
-        lppr1.setTransactionType(DEFAULT);
+        lppr.setTransactionType(REPAYMENT);
-        lppr1.setFutureInstallmentAllocationRule(LAST_INSTALLMENT);
+        lppr.setFutureInstallmentAllocationRule(LAST_INSTALLMENT);
-        lppr1.setAllocationTypes(EnumSet.allOf(PaymentAllocationType.class).stream().toList());
+        ArrayList<PaymentAllocationType> allocationTypes = new ArrayList<>(EnumSet.allOf(PaymentAllocationType.class).stream().toList());
-        return lppr1;
+        Collections.swap(allocationTypes, 0, 4);
+        Collections.swap(allocationTypes, 3, 8);
+        Collections.swap(allocationTypes, 7, 11);
+        lppr.setAllocationTypes(allocationTypes);
+        return lppr;
+    }
+
+    @NotNull
+    private static LoanProductPaymentAllocationRule createLoanProductAllocationRule4() {
+        LoanProductPaymentAllocationRule lppr = new LoanProductPaymentAllocationRule();
+        lppr.setTransactionType(DEFAULT);
+        lppr.setFutureInstallmentAllocationRule(LAST_INSTALLMENT);
+        ArrayList<PaymentAllocationType> allocationTypes = new ArrayList<>(EnumSet.allOf(PaymentAllocationType.class).stream().toList());
+        Collections.swap(allocationTypes, 0, 4);
+        Collections.swap(allocationTypes, 1, 5);
+        Collections.swap(allocationTypes, 2, 6);
+        Collections.swap(allocationTypes, 3, 7);
+        lppr.setAllocationTypes(allocationTypes);
+        return lppr;
     }
 
     @NotNull
     private static List<Pair<Integer, PaymentAllocationType>> createPaymentAllocationTypeList() {
         AtomicInteger i = new AtomicInteger(1);
-        List<Pair<Integer, PaymentAllocationType>> list = EnumSet.allOf(PaymentAllocationType.class).stream()
+        return EnumSet.allOf(PaymentAllocationType.class).stream().map(p -> Pair.of(i.getAndIncrement(), p)).toList();
-                .map(p -> Pair.of(i.getAndIncrement(), p)).toList();
-        return list;
     }
 
     private void assertPlatformException(String expectedMessage, String expectedCode,

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/api/LoansApiResource.java

@@ -136,6 +136,8 @@ import org.apache.fineract.portfolio.loanaccount.guarantor.data.GuarantorData;
 import org.apache.fineract.portfolio.loanaccount.guarantor.service.GuarantorReadPlatformService;
 import org.apache.fineract.portfolio.loanaccount.loanschedule.data.LoanScheduleData;
 import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleModel;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleProcessingType;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleType;
 import org.apache.fineract.portfolio.loanaccount.loanschedule.service.LoanScheduleCalculationPlatformService;
 import org.apache.fineract.portfolio.loanaccount.loanschedule.service.LoanScheduleHistoryReadPlatformService;
 import org.apache.fineract.portfolio.loanaccount.service.GLIMAccountInfoReadPlatformService;
@@ -1060,8 +1062,8 @@ public class LoansApiResource {
                 repaymentStrategyOptions, interestRateFrequencyTypeOptions, amortizationTypeOptions, interestTypeOptions,
                 interestCalculationPeriodTypeOptions, fundOptions, chargeOptions, chargeTemplate, allowedLoanOfficers, loanPurposeOptions,
                 loanCollateralOptions, calendarOptions, notes, accountLinkingOptions, linkedAccount, disbursementData, emiAmountVariations,
-                overdueCharges, paidInAdvanceTemplate, interestRatesPeriods, clientActiveLoanOptions, rates, isRatesEnabled,
+                overdueCharges, paidInAdvanceTemplate, interestRatesPeriods, clientActiveLoanOptions, rates, isRatesEnabled, collectionData,
-                collectionData);
+                LoanScheduleType.getValuesAsEnumOptionDataList(), LoanScheduleProcessingType.getValuesAsEnumOptionDataList());
 
         final ApiRequestJsonSerializationSettings settings = this.apiRequestParameterHelper.process(uriInfo.getQueryParameters(),
                 mandatoryResponseParameters);

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/api/LoansApiResourceSwagger.java

@@ -23,6 +23,7 @@ import java.math.BigDecimal;
 import java.time.LocalDate;
 import java.util.List;
 import java.util.Set;
+import org.apache.fineract.infrastructure.core.data.EnumOptionData;
 import org.apache.fineract.portfolio.delinquency.api.DelinquencyApiResourceSwagger.GetDelinquencyRangesResponse;
 
 /**
@@ -1086,6 +1087,10 @@ final class LoansApiResourceSwagger {
         public Boolean enableAutoRepaymentForDownPayment;
         @Schema(example = "false")
         public Boolean disableScheduleExtensionForDownPayment;
+        @Schema(example = "CUMULATIVE")
+        public EnumOptionData loanScheduleType;
+        @Schema(example = "HORIZONTAL")
+        public EnumOptionData loanScheduleProcessingType;
     }
 
     @Schema(description = "GetLoansResponse")
@@ -1169,6 +1174,10 @@ final class LoansApiResourceSwagger {
         public Integer graceOnInterestPayment;
         @Schema(example = "1")
         public Integer graceOnArrearsAgeing;
+        @Schema(example = "CUMULATIVE")
+        public String loanScheduleType;
+        @Schema(example = "HORIZONTAL")
+        public String loanScheduleProcessingType;
     }
 
     @Schema(description = "PostLoansResponse")
@@ -1312,6 +1321,10 @@ final class LoansApiResourceSwagger {
         public List<PutLoansLoanIdChanges> charges;
         public List<PutLoansLoanIdCollateral> collateral;
         public List<PutLoansLoanIdDisbursementData> disbursementData;
+        @Schema(example = "CUMULATIVE")
+        public String loanScheduleType;
+        @Schema(example = "HORIZONTAL")
+        public String loanScheduleProcessingType;
 
         static final class PutLoansLoanIdChanges {
 

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/data/LoanAccountData.java

@@ -166,6 +166,8 @@ public class LoanAccountData {
     private Collection<ChargeData> chargeOptions;
     private Collection<CodeValueData> loanCollateralOptions;
     private Collection<CalendarData> calendarOptions;
+    private List<EnumOptionData> loanScheduleTypeOptions;
+    private List<EnumOptionData> loanScheduleProcessingTypeOptions;
 
     @Transient
     private BigDecimal feeChargesAtDisbursementCharged;
@@ -262,6 +264,9 @@ public class LoanAccountData {
     private Boolean enableAutoRepaymentForDownPayment;
     private Boolean disableScheduleExtensionForDownPayment;
 
+    private EnumOptionData loanScheduleType;
+    private EnumOptionData loanScheduleProcessingType;
+
     public static LoanAccountData importInstanceIndividual(EnumOptionData loanTypeEnumOption, Long clientId, Long productId,
             Long loanOfficerId, LocalDate submittedOnDate, Long fundId, BigDecimal principal, Integer numberOfRepayments,
             Integer repaymentEvery, EnumOptionData repaidEveryFrequencyEnums, Integer loanTermFrequency,
@@ -389,7 +394,10 @@ public class LoanAccountData {
                 .setIsEqualAmortization(acc.isEqualAmortization).setRates(acc.rates).setIsRatesEnabled(acc.isRatesEnabled)
                 .setFixedPrincipalPercentagePerInstallment(acc.fixedPrincipalPercentagePerInstallment).setDelinquent(acc.delinquent)
                 .setDelinquencyRange(acc.delinquencyRange).setDisallowExpectedDisbursements(acc.disallowExpectedDisbursements)
-                .setFraud(acc.fraud).setOverpaidOnDate(acc.overpaidOnDate).setChargedOff(acc.chargedOff);
+                .setFraud(acc.fraud).setOverpaidOnDate(acc.overpaidOnDate).setChargedOff(acc.chargedOff)
+                .setLoanScheduleType(acc.loanScheduleType).setLoanScheduleProcessingType(acc.loanScheduleProcessingType)
+                .setLoanScheduleTypeOptions(acc.loanScheduleTypeOptions)
+                .setLoanScheduleProcessingTypeOptions(acc.loanScheduleProcessingTypeOptions);
     }
 
     /**
@@ -460,7 +468,10 @@ public class LoanAccountData {
                 .setIsEqualAmortization(acc.isEqualAmortization).setRates(acc.rates).setIsRatesEnabled(acc.isRatesEnabled)
                 .setFixedPrincipalPercentagePerInstallment(acc.fixedPrincipalPercentagePerInstallment).setDelinquent(acc.delinquent)
                 .setDelinquencyRange(acc.delinquencyRange).setDisallowExpectedDisbursements(acc.disallowExpectedDisbursements)
-                .setFraud(acc.fraud).setOverpaidOnDate(acc.overpaidOnDate).setChargedOff(acc.chargedOff);
+                .setFraud(acc.fraud).setOverpaidOnDate(acc.overpaidOnDate).setChargedOff(acc.chargedOff)
+                .setLoanScheduleType(acc.loanScheduleType).setLoanScheduleProcessingType(acc.loanScheduleProcessingType)
+                .setLoanScheduleTypeOptions(acc.loanScheduleTypeOptions)
+                .setLoanScheduleProcessingTypeOptions(acc.loanScheduleProcessingTypeOptions);
     }
 
     public static LoanAccountData loanProductWithTemplateDefaults(final LoanProductData product,
@@ -472,7 +483,8 @@ public class LoanAccountData {
             final Collection<EnumOptionData> interestTypeOptions, final Collection<EnumOptionData> interestCalculationPeriodTypeOptions,
             final Collection<FundData> fundOptions, final Collection<ChargeData> chargeOptions,
             final Collection<CodeValueData> loanPurposeOptions, final Collection<CodeValueData> loanCollateralOptions,
-            final Integer loanCycleNumber, final Collection<LoanAccountSummaryData> clientActiveLoanOptions) {
+            final Integer loanCycleNumber, final Collection<LoanAccountSummaryData> clientActiveLoanOptions,
+            final List<EnumOptionData> loanScheduleTypeOptions, final List<EnumOptionData> loanScheduleProcessingTypeOptions) {
 
         final EnumOptionData termPeriodFrequencyType = product.getRepaymentFrequencyType();
 
@@ -562,7 +574,10 @@ public class LoanAccountData {
                 .setMaximumGap(product.getMaximumGap()).setTopup(product.isCanUseForTopup())
                 .setClientActiveLoanOptions(clientActiveLoanOptions).setIsEqualAmortization(product.isEqualAmortization())
                 .setFixedPrincipalPercentagePerInstallment(product.getFixedPrincipalPercentagePerInstallment())
-                .setDelinquent(CollectionData.template()).setDisallowExpectedDisbursements(product.getDisallowExpectedDisbursements());
+                .setDelinquent(CollectionData.template()).setDisallowExpectedDisbursements(product.getDisallowExpectedDisbursements())
+                .setLoanScheduleType(product.getLoanScheduleType()).setLoanScheduleProcessingType(product.getLoanScheduleProcessingType())
+                .setLoanScheduleTypeOptions(loanScheduleTypeOptions)
+                .setLoanScheduleProcessingTypeOptions(loanScheduleProcessingTypeOptions);
     }
 
     public static LoanAccountData populateLoanProductDefaults(final LoanAccountData acc, final LoanProductData product) {
@@ -628,7 +643,8 @@ public class LoanAccountData {
                 .setIsEqualAmortization(product.isEqualAmortization()).setRates(acc.rates).setIsRatesEnabled(acc.isRatesEnabled)
                 .setFixedPrincipalPercentagePerInstallment(product.getFixedPrincipalPercentagePerInstallment()).setDelinquent(delinquent)
                 .setDisallowExpectedDisbursements(product.getDisallowExpectedDisbursements()).setFraud(acc.fraud)
-                .setOverpaidOnDate(acc.overpaidOnDate).setChargedOff(acc.chargedOff);
+                .setOverpaidOnDate(acc.overpaidOnDate).setChargedOff(acc.chargedOff).setLoanScheduleType(acc.getLoanScheduleType())
+                .setLoanScheduleProcessingType(acc.getLoanScheduleProcessingType());
     }
 
     /*
@@ -664,7 +680,8 @@ public class LoanAccountData {
             final DelinquencyRangeData delinquencyRange, final boolean disallowExpectedDisbursements, final boolean fraud,
             LocalDate lastClosedBusinessDate, LocalDate overpaidOnDate, final boolean chargedOff, final boolean enableDownPayment,
             final BigDecimal disbursedAmountPercentageForDownPayment, final boolean enableAutoRepaymentForDownPayment,
-            final boolean disableScheduleExtensionForDownPayment, final boolean enableInstallmentLevelDelinquency) {
+            final boolean disableScheduleExtensionForDownPayment, final boolean enableInstallmentLevelDelinquency,
+            final EnumOptionData loanScheduleType, final EnumOptionData loanScheduleProcessingType) {
 
         final CollectionData delinquent = CollectionData.template();
 
@@ -708,7 +725,8 @@ public class LoanAccountData {
                 .setEnableDownPayment(enableDownPayment).setDisbursedAmountPercentageForDownPayment(disbursedAmountPercentageForDownPayment)
                 .setEnableAutoRepaymentForDownPayment(enableAutoRepaymentForDownPayment)
                 .setDisableScheduleExtensionForDownPayment(disableScheduleExtensionForDownPayment)
-                .setEnableInstallmentLevelDelinquency(enableInstallmentLevelDelinquency);
+                .setEnableInstallmentLevelDelinquency(enableInstallmentLevelDelinquency).setLoanScheduleType(loanScheduleType)
+                .setLoanScheduleProcessingType(loanScheduleProcessingType);
     }
 
     /*
@@ -732,7 +750,8 @@ public class LoanAccountData {
             final Collection<LoanTermVariationsData> emiAmountVariations, final Collection<ChargeData> overdueCharges,
             final PaidInAdvanceData paidInAdvance, Collection<InterestRatePeriodData> interestRatesPeriods,
             final Collection<LoanAccountSummaryData> clientActiveLoanOptions, final List<RateData> rates, final Boolean isRatesEnabled,
-            final CollectionData delinquent) {
+            final CollectionData delinquent, final List<EnumOptionData> loanScheduleTypeOptions,
+            final List<EnumOptionData> loanScheduleProcessingTypeOptions) {
 
         // TODO: why are these variables 'calendarData', 'chargeTemplate' never used (see original private constructor)
 
@@ -797,7 +816,9 @@ public class LoanAccountData {
                 .setDisbursedAmountPercentageForDownPayment(acc.disbursedAmountPercentageForDownPayment)
                 .setEnableAutoRepaymentForDownPayment(acc.enableAutoRepaymentForDownPayment)
                 .setDisableScheduleExtensionForDownPayment(acc.disableScheduleExtensionForDownPayment)
-                .setEnableInstallmentLevelDelinquency(acc.enableInstallmentLevelDelinquency);
+                .setEnableInstallmentLevelDelinquency(acc.enableInstallmentLevelDelinquency).setLoanScheduleType(acc.loanScheduleType)
+                .setLoanScheduleProcessingType(acc.loanScheduleProcessingType).setLoanScheduleTypeOptions(loanScheduleTypeOptions)
+                .setLoanScheduleProcessingTypeOptions(loanScheduleProcessingTypeOptions);
     }
 
     public static LoanAccountData associationsAndTemplate(final LoanAccountData acc, final Collection<LoanProductData> productOptions,
@@ -811,7 +832,8 @@ public class LoanAccountData {
                 acc.interestTypeOptions, acc.interestCalculationPeriodTypeOptions, acc.fundOptions, acc.chargeOptions, null,
                 allowedLoanOfficers, acc.loanPurposeOptions, acc.loanCollateralOptions, calendarOptions, acc.notes, accountLinkingOptions,
                 acc.linkedAccount, acc.disbursementDetails, acc.emiAmountVariations, acc.overdueCharges, acc.paidInAdvance,
-                acc.interestRatesPeriods, acc.clientActiveLoanOptions, acc.rates, isRatesEnabled, acc.delinquent);
+                acc.interestRatesPeriods, acc.clientActiveLoanOptions, acc.rates, isRatesEnabled, acc.delinquent,
+                acc.loanScheduleTypeOptions, acc.loanScheduleProcessingTypeOptions);
     }
 
     public static LoanAccountData associateGroup(final LoanAccountData acc, final GroupGeneralData group) {
@@ -873,7 +895,9 @@ public class LoanAccountData {
                 .setFixedPrincipalPercentagePerInstallment(acc.fixedPrincipalPercentagePerInstallment).setDelinquent(acc.delinquent)
                 .setDelinquencyRange(acc.delinquencyRange).setDisallowExpectedDisbursements(acc.disallowExpectedDisbursements)
                 .setFraud(acc.fraud).setOverpaidOnDate(acc.overpaidOnDate).setChargedOff(acc.chargedOff)
-                .setEnableInstallmentLevelDelinquency(acc.enableInstallmentLevelDelinquency);
+                .setEnableInstallmentLevelDelinquency(acc.enableInstallmentLevelDelinquency).setLoanScheduleType(acc.loanScheduleType)
+                .setLoanScheduleProcessingType(acc.loanScheduleProcessingType).setLoanScheduleTypeOptions(acc.loanScheduleTypeOptions)
+                .setLoanScheduleProcessingTypeOptions(acc.loanScheduleProcessingTypeOptions);
     }
 
     public static LoanAccountData associateMemberVariations(final LoanAccountData acc, final Map<Long, Integer> memberLoanCycle) {
@@ -971,7 +995,9 @@ public class LoanAccountData {
                 .setFixedPrincipalPercentagePerInstallment(acc.fixedPrincipalPercentagePerInstallment).setDelinquent(acc.delinquent)
                 .setDelinquencyRange(acc.delinquencyRange).setDisallowExpectedDisbursements(acc.disallowExpectedDisbursements)
                 .setFraud(acc.fraud).setOverpaidOnDate(acc.overpaidOnDate).setChargedOff(acc.chargedOff)
-                .setEnableInstallmentLevelDelinquency(acc.enableInstallmentLevelDelinquency);
+                .setEnableInstallmentLevelDelinquency(acc.enableInstallmentLevelDelinquency).setLoanScheduleType(acc.loanScheduleType)
+                .setLoanScheduleProcessingType(acc.loanScheduleProcessingType).setLoanScheduleTypeOptions(acc.loanScheduleTypeOptions)
+                .setLoanScheduleProcessingTypeOptions(acc.loanScheduleProcessingTypeOptions);
     }
 
     public static LoanAccountData withInterestRecalculationCalendarData(final LoanAccountData acc, final CalendarData calendarData,
@@ -1037,7 +1063,9 @@ public class LoanAccountData {
                 .setFixedPrincipalPercentagePerInstallment(acc.fixedPrincipalPercentagePerInstallment).setDelinquent(acc.delinquent)
                 .setDelinquencyRange(acc.delinquencyRange).setDisallowExpectedDisbursements(acc.disallowExpectedDisbursements)
                 .setFraud(acc.fraud).setOverpaidOnDate(acc.overpaidOnDate).setChargedOff(acc.chargedOff)
-                .setEnableInstallmentLevelDelinquency(acc.enableInstallmentLevelDelinquency);
+                .setEnableInstallmentLevelDelinquency(acc.enableInstallmentLevelDelinquency).setLoanScheduleType(acc.loanScheduleType)
+                .setLoanScheduleProcessingType(acc.loanScheduleProcessingType).setLoanScheduleTypeOptions(acc.loanScheduleTypeOptions)
+                .setLoanScheduleProcessingTypeOptions(acc.loanScheduleProcessingTypeOptions);
     }
 
     public static LoanAccountData withLoanCalendarData(final LoanAccountData acc, final CalendarData calendarData) {
@@ -1096,7 +1124,9 @@ public class LoanAccountData {
                 .setFixedPrincipalPercentagePerInstallment(acc.fixedPrincipalPercentagePerInstallment).setDelinquent(acc.delinquent)
                 .setDelinquencyRange(acc.delinquencyRange).setDisallowExpectedDisbursements(acc.disallowExpectedDisbursements)
                 .setFraud(acc.fraud).setOverpaidOnDate(acc.overpaidOnDate).setChargedOff(acc.chargedOff)
-                .setEnableInstallmentLevelDelinquency(acc.enableInstallmentLevelDelinquency);
+                .setEnableInstallmentLevelDelinquency(acc.enableInstallmentLevelDelinquency).setLoanScheduleType(acc.loanScheduleType)
+                .setLoanScheduleProcessingType(acc.loanScheduleProcessingType).setLoanScheduleTypeOptions(acc.loanScheduleTypeOptions)
+                .setLoanScheduleProcessingTypeOptions(acc.loanScheduleProcessingTypeOptions);
     }
 
     public static LoanAccountData withOriginalSchedule(final LoanAccountData acc, final LoanScheduleData originalSchedule) {
@@ -1158,7 +1188,9 @@ public class LoanAccountData {
                 .setFixedPrincipalPercentagePerInstallment(acc.fixedPrincipalPercentagePerInstallment).setDelinquent(acc.delinquent)
                 .setDelinquencyRange(acc.delinquencyRange).setDisallowExpectedDisbursements(acc.disallowExpectedDisbursements)
                 .setFraud(acc.fraud).setOverpaidOnDate(acc.overpaidOnDate).setChargedOff(acc.chargedOff)
-                .setEnableInstallmentLevelDelinquency(acc.enableInstallmentLevelDelinquency);
+                .setEnableInstallmentLevelDelinquency(acc.enableInstallmentLevelDelinquency).setLoanScheduleType(acc.loanScheduleType)
+                .setLoanScheduleProcessingType(acc.loanScheduleProcessingType).setLoanScheduleTypeOptions(acc.loanScheduleTypeOptions)
+                .setLoanScheduleProcessingTypeOptions(acc.loanScheduleProcessingTypeOptions);
     }
 
     public static final Comparator<LoanAccountData> ClientNameComparator = (loan1, loan2) -> {

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/service/LoanScheduleAssembler.java

@@ -98,6 +98,7 @@ import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanApplica
 import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleGenerator;
 import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleGeneratorFactory;
 import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleModel;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleProcessingType;
 import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleType;
 import org.apache.fineract.portfolio.loanaccount.serialization.VariableLoanScheduleFromApiJsonValidator;
 import org.apache.fineract.portfolio.loanaccount.service.LoanChargeAssembler;
@@ -472,7 +473,17 @@ public class LoanScheduleAssembler {
                     .isDisableScheduleExtensionForDownPayment();
 
         }
+
         LoanScheduleType loanScheduleType = loanProduct.getLoanProductRelatedDetail().getLoanScheduleType();
+        if (this.fromApiJsonHelper.parameterExists(LoanProductConstants.LOAN_SCHEDULE_TYPE, element)) {
+            LoanScheduleType.valueOf(this.fromApiJsonHelper.extractStringNamed(LoanProductConstants.LOAN_SCHEDULE_TYPE, element));
+        }
+        LoanScheduleProcessingType loanScheduleProcessingType = loanProduct.getLoanProductRelatedDetail().getLoanScheduleProcessingType();
+
+        if (this.fromApiJsonHelper.parameterExists(LoanProductConstants.LOAN_SCHEDULE_TYPE, element)) {
+            LoanScheduleProcessingType
+                    .valueOf(this.fromApiJsonHelper.extractStringNamed(LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE, element));
+        }
         return LoanApplicationTerms.assembleFrom(applicationCurrency, loanTermFrequency, loanTermPeriodFrequencyType, numberOfRepayments,
                 repaymentEvery, repaymentPeriodFrequencyType, nthDay, weekDayType, amortizationMethod, interestMethod,
                 interestRatePerPeriod, interestRatePeriodFrequencyType, annualNominalInterestRate, interestCalculationPeriodMethod,
@@ -487,7 +498,7 @@ public class LoanScheduleAssembler {
                 allowCompoundingOnEod, isEqualAmortization, isInterestToBeRecoveredFirstWhenGreaterThanEMI,
                 fixedPrincipalPercentagePerInstallment, isPrincipalCompoundingDisabledForOverdueLoans, isDownPaymentEnabled,
                 disbursedAmountPercentageForDownPayment, isAutoRepaymentForDownPaymentEnabled, repaymentStartDateType, submittedOnDate,
-                isScheduleExtensionForDownPaymentDisabled, loanScheduleType);
+                isScheduleExtensionForDownPaymentDisabled, loanScheduleType, loanScheduleProcessingType);
     }
 
     private CalendarInstance createCalendarForSameAsRepayment(final Integer repaymentEvery,

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/serialization/LoanApplicationCommandFromApiJsonHelper.java

@@ -49,13 +49,18 @@ import org.apache.fineract.portfolio.collateralmanagement.domain.ClientCollatera
 import org.apache.fineract.portfolio.loanaccount.api.LoanApiConstants;
 import org.apache.fineract.portfolio.loanaccount.domain.Loan;
 import org.apache.fineract.portfolio.loanaccount.domain.LoanRepaymentScheduleTransactionProcessorFactory;
+import org.apache.fineract.portfolio.loanaccount.domain.transactionprocessor.impl.AdvancedPaymentScheduleTransactionProcessor;
 import org.apache.fineract.portfolio.loanaccount.exception.InvalidAmountOfCollateralQuantity;
 import org.apache.fineract.portfolio.loanaccount.exception.InvalidAmountOfCollaterals;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleProcessingType;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleType;
 import org.apache.fineract.portfolio.loanproduct.LoanProductConstants;
+import org.apache.fineract.portfolio.loanproduct.domain.AdvancedPaymentAllocationsValidator;
 import org.apache.fineract.portfolio.loanproduct.domain.AmortizationMethod;
 import org.apache.fineract.portfolio.loanproduct.domain.InterestCalculationPeriodMethod;
 import org.apache.fineract.portfolio.loanproduct.domain.InterestMethod;
 import org.apache.fineract.portfolio.loanproduct.domain.LoanProduct;
+import org.apache.fineract.portfolio.loanproduct.domain.LoanProductPaymentAllocationRule;
 import org.apache.fineract.portfolio.loanproduct.exception.EqualAmortizationUnsupportedFeatureException;
 import org.apache.fineract.portfolio.savings.domain.SavingsAccount;
 import org.springframework.stereotype.Component;
@@ -99,7 +104,8 @@ public final class LoanApplicationCommandFromApiJsonHelper {
             LoanApiConstants.applicationId, // glim specific
             LoanApiConstants.lastApplication, // glim specific
             LoanApiConstants.daysInYearTypeParameterName, LoanApiConstants.fixedPrincipalPercentagePerInstallmentParamName,
-            LoanApiConstants.DISALLOW_EXPECTED_DISBURSEMENTS, LoanApiConstants.FRAUD_ATTRIBUTE_NAME));
+            LoanApiConstants.DISALLOW_EXPECTED_DISBURSEMENTS, LoanApiConstants.FRAUD_ATTRIBUTE_NAME,
+            LoanProductConstants.LOAN_SCHEDULE_TYPE, LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE));
     public static final String LOANAPPLICATION_UNDO = "loanapplication.undo";
 
     private final FromJsonHelper fromApiJsonHelper;
@@ -107,6 +113,7 @@ public final class LoanApplicationCommandFromApiJsonHelper {
     private final ClientCollateralManagementRepositoryWrapper clientCollateralManagementRepositoryWrapper;
     private final LoanChargeApiJsonValidator loanChargeApiJsonValidator;
     private final LoanRepaymentScheduleTransactionProcessorFactory loanRepaymentScheduleTransactionProcessorFactory;
+    private final AdvancedPaymentAllocationsValidator advancedPaymentAllocationsValidator;
 
     public void validateForCreate(final String json, final boolean isMeetingMandatoryForJLGLoans, final LoanProduct loanProduct) {
         if (StringUtils.isBlank(json)) {
@@ -543,6 +550,33 @@ public final class LoanApplicationCommandFromApiJsonHelper {
         }
 
         validateLoanMultiDisbursementDate(element, baseDataValidator, expectedDisbursementDate, principal);
+
+        final String loanScheduleType = this.fromApiJsonHelper.extractStringNamed(LoanProductConstants.LOAN_SCHEDULE_TYPE, element);
+        baseDataValidator.reset().parameter(LoanProductConstants.LOAN_SCHEDULE_TYPE).value(loanScheduleType).ignoreIfNull()
+                .isOneOfEnumValues(LoanScheduleType.class);
+
+        String loanScheduleProcessingType = loanProduct.getLoanProductRelatedDetail().getLoanScheduleProcessingType().name();
+        if (this.fromApiJsonHelper.parameterExists(LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE, element)) {
+            loanScheduleProcessingType = this.fromApiJsonHelper.extractStringNamed(LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE,
+                    element);
+            baseDataValidator.reset().parameter(LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE).value(loanScheduleProcessingType)
+                    .isOneOfEnumValues(LoanScheduleProcessingType.class);
+        }
+        if (LoanScheduleProcessingType.VERTICAL.equals(LoanScheduleProcessingType.valueOf(loanScheduleProcessingType))
+                && !AdvancedPaymentScheduleTransactionProcessor.ADVANCED_PAYMENT_ALLOCATION_STRATEGY
+                        .equals(transactionProcessingStrategy)) {
+            baseDataValidator.reset().parameter(LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE).failWithCode(
+                    "supported.only.with.advanced.payment.allocation.strategy",
+                    "Vertical repayment schedule processing is only available with `Advanced payment allocation` strategy");
+        }
+
+        List<LoanProductPaymentAllocationRule> allocationRules = loanProduct.getPaymentAllocationRules();
+
+        if (LoanScheduleProcessingType.HORIZONTAL.name().equals(loanScheduleProcessingType)
+                && AdvancedPaymentScheduleTransactionProcessor.ADVANCED_PAYMENT_ALLOCATION_STRATEGY.equals(transactionProcessingStrategy)) {
+            advancedPaymentAllocationsValidator.checkGroupingOfAllocationRules(allocationRules);
+        }
+
         validatePartialPeriodSupport(interestCalculationPeriodType, baseDataValidator, element, loanProduct);
         if (!dataValidationErrors.isEmpty()) {
             throw new PlatformApiDataValidationException(dataValidationErrors);
@@ -625,9 +659,10 @@ public final class LoanApplicationCommandFromApiJsonHelper {
                     .integerGreaterThanZero();
         }
 
+        String transactionProcessingStrategy = existingLoanApplication.getTransactionProcessingStrategyCode();
         if (this.fromApiJsonHelper.parameterExists(LoanApiConstants.transactionProcessingStrategyCodeParameterName, element)) {
             atLeastOneParameterPassedForUpdate = true;
-            final String transactionProcessingStrategy = this.fromApiJsonHelper
+            transactionProcessingStrategy = this.fromApiJsonHelper
                     .extractStringNamed(LoanApiConstants.transactionProcessingStrategyCodeParameterName, element);
             baseDataValidator.reset().parameter(LoanApiConstants.transactionProcessingStrategyCodeParameterName)
                     .value(transactionProcessingStrategy).notNull();
@@ -1049,6 +1084,34 @@ public final class LoanApplicationCommandFromApiJsonHelper {
         validateLoanMultiDisbursementDate(element, baseDataValidator, expectedDisbursementDate, principal);
         validatePartialPeriodSupport(interestCalculationPeriodType, baseDataValidator, element, loanProduct);
 
+        if (this.fromApiJsonHelper.parameterExists(LoanProductConstants.LOAN_SCHEDULE_TYPE, element)) {
+            final String loanScheduleType = this.fromApiJsonHelper.extractStringNamed(LoanProductConstants.LOAN_SCHEDULE_TYPE, element);
+            baseDataValidator.reset().parameter(LoanProductConstants.LOAN_SCHEDULE_TYPE).value(loanScheduleType).ignoreIfNull()
+                    .isOneOfEnumValues(LoanScheduleType.class);
+
+        }
+        String loanScheduleProcessingType = existingLoanApplication.getLoanRepaymentScheduleDetail().getLoanScheduleProcessingType().name();
+        if (this.fromApiJsonHelper.parameterExists(LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE, element)) {
+            loanScheduleProcessingType = this.fromApiJsonHelper.extractStringNamed(LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE,
+                    element);
+            baseDataValidator.reset().parameter(LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE).value(loanScheduleProcessingType)
+                    .ignoreIfNull().isOneOfEnumValues(LoanScheduleProcessingType.class);
+        }
+        if (LoanScheduleProcessingType.VERTICAL.equals(LoanScheduleProcessingType.valueOf(loanScheduleProcessingType))
+                && !AdvancedPaymentScheduleTransactionProcessor.ADVANCED_PAYMENT_ALLOCATION_STRATEGY
+                        .equals(transactionProcessingStrategy)) {
+            baseDataValidator.reset().parameter(LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE).failWithCode(
+                    "supported.only.with.advanced.payment.allocation.strategy",
+                    "Vertical repayment schedule processing is only available with `Advanced payment allocation` strategy");
+        }
+
+        List<LoanProductPaymentAllocationRule> allocationRules = loanProduct.getPaymentAllocationRules();
+
+        if (LoanScheduleProcessingType.HORIZONTAL.name().equals(loanScheduleProcessingType)
+                && AdvancedPaymentScheduleTransactionProcessor.ADVANCED_PAYMENT_ALLOCATION_STRATEGY.equals(transactionProcessingStrategy)) {
+            advancedPaymentAllocationsValidator.checkGroupingOfAllocationRules(allocationRules);
+        }
+
         if (!dataValidationErrors.isEmpty()) {
             throw new PlatformApiDataValidationException("validation.msg.validation.errors.exist", "Validation errors exist.",
                     dataValidationErrors);

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/service/LoanReadPlatformServiceImpl.java

@@ -123,6 +123,8 @@ import org.apache.fineract.portfolio.loanaccount.exception.LoanTransactionNotFou
 import org.apache.fineract.portfolio.loanaccount.loanschedule.data.LoanScheduleData;
 import org.apache.fineract.portfolio.loanaccount.loanschedule.data.LoanSchedulePeriodData;
 import org.apache.fineract.portfolio.loanaccount.loanschedule.data.OverdueLoanScheduleData;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleProcessingType;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleType;
 import org.apache.fineract.portfolio.loanaccount.mapper.LoanTransactionRelationMapper;
 import org.apache.fineract.portfolio.loanproduct.data.LoanProductData;
 import org.apache.fineract.portfolio.loanproduct.data.TransactionProcessingStrategyData;
@@ -696,7 +698,7 @@ public class LoanReadPlatformServiceImpl implements LoanReadPlatformService, Loa
                     + " l.total_recovered_derived as totalRecovered, topuploan.account_no as closureLoanAccountNo, "
                     + " topup.topup_amount as topupAmount, l.last_closed_business_date as lastClosedBusinessDate,l.overpaidon_date as overpaidOnDate, "
                     + " l.is_charged_off as isChargedOff, l.charge_off_reason_cv_id as chargeOffReasonId, codec.code_value as chargeOffReason, l.charged_off_on_date as chargedOffOnDate, l.enable_down_payment as enableDownPayment, l.disbursed_amount_percentage_for_down_payment as disbursedAmountPercentageForDownPayment, l.enable_auto_repayment_for_down_payment as enableAutoRepaymentForDownPayment, l.disable_schedule_extension_for_down_payment as disableScheduleExtensionForDownPayment,"
-                    + " cobu.username as chargedOffByUsername, cobu.firstname as chargedOffByFirstname, cobu.lastname as chargedOffByLastname "
+                    + " cobu.username as chargedOffByUsername, cobu.firstname as chargedOffByFirstname, cobu.lastname as chargedOffByLastname, l.loan_schedule_type as loanScheduleType, l.loan_schedule_processing_type as loanScheduleProcessingType "
                     + " from m_loan l" //
                     + " join m_product_loan lp on lp.id = l.product_id" //
                     + " left join m_loan_recalculation_details lir on lir.loan_id = l.id join m_currency rc on rc."
@@ -1044,6 +1046,10 @@ public class LoanReadPlatformServiceImpl implements LoanReadPlatformService, Loa
             final boolean enableAutoRepaymentForDownPayment = rs.getBoolean("enableAutoRepaymentForDownPayment");
             final boolean disableScheduleExtensionForDownPayment = rs.getBoolean("disableScheduleExtensionForDownPayment");
             final boolean enableInstallmentLevelDelinquency = rs.getBoolean("enableInstallmentLevelDelinquency");
+            final String loanScheduleTypeStr = rs.getString("loanScheduleType");
+            final LoanScheduleType loanScheduleType = LoanScheduleType.valueOf(loanScheduleTypeStr);
+            final String loanScheduleProcessingTypeStr = rs.getString("loanScheduleProcessingType");
+            final LoanScheduleProcessingType loanScheduleProcessingType = LoanScheduleProcessingType.valueOf(loanScheduleProcessingTypeStr);
 
             return LoanAccountData.basicLoanDetails(id, accountNo, status, externalId, clientId, clientAccountNo, clientName,
                     clientOfficeId, clientExternalId, groupData, loanType, loanProductId, loanProductName, loanProductDescription,
@@ -1061,7 +1067,8 @@ public class LoanReadPlatformServiceImpl implements LoanReadPlatformService, Loa
                     canUseForTopup, isTopup, closureLoanId, closureLoanAccountNo, topupAmount, isEqualAmortization,
                     fixedPrincipalPercentagePerInstallment, delinquencyRange, disallowExpectedDisbursements, isFraud,
                     lastClosedBusinessDate, overpaidOnDate, isChargedOff, enableDownPayment, disbursedAmountPercentageForDownPayment,
-                    enableAutoRepaymentForDownPayment, disableScheduleExtensionForDownPayment, enableInstallmentLevelDelinquency);
+                    enableAutoRepaymentForDownPayment, disableScheduleExtensionForDownPayment, enableInstallmentLevelDelinquency,
+                    loanScheduleType.asEnumOptionData(), loanScheduleProcessingType.asEnumOptionData());
         }
     }
 
@@ -1552,7 +1559,8 @@ public class LoanReadPlatformServiceImpl implements LoanReadPlatformService, Loa
         return LoanAccountData.loanProductWithTemplateDefaults(loanProduct, loanTermFrequencyTypeOptions, repaymentFrequencyTypeOptions,
                 repaymentFrequencyNthDayTypeOptions, repaymentFrequencyDaysOfWeekTypeOptions, repaymentStrategyOptions,
                 interestRateFrequencyTypeOptions, amortizationTypeOptions, interestTypeOptions, interestCalculationPeriodTypeOptions,
-                fundOptions, chargeOptions, loanPurposeOptions, loanCollateralOptions, loanCycleCounter, activeLoanOptions);
+                fundOptions, chargeOptions, loanPurposeOptions, loanCollateralOptions, loanCycleCounter, activeLoanOptions,
+                LoanScheduleType.getValuesAsEnumOptionDataList(), LoanScheduleProcessingType.getValuesAsEnumOptionDataList());
     }
 
     @Override

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanproduct/api/LoanProductsApiResource.java

@@ -76,6 +76,8 @@ import org.apache.fineract.portfolio.floatingrates.service.FloatingRatesReadPlat
 import org.apache.fineract.portfolio.fund.data.FundData;
 import org.apache.fineract.portfolio.fund.service.FundReadPlatformService;
 import org.apache.fineract.portfolio.loanaccount.api.LoanApiConstants;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleProcessingType;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleType;
 import org.apache.fineract.portfolio.loanproduct.LoanProductConstants;
 import org.apache.fineract.portfolio.loanproduct.data.LoanProductData;
 import org.apache.fineract.portfolio.loanproduct.data.TransactionProcessingStrategyData;
@@ -424,7 +426,8 @@ public class LoanProductsApiResource {
                 preCloseInterestCalculationStrategyOptions, floatingRateOptions, interestRecalculationNthDayTypeOptions,
                 interestRecalculationDayOfWeekTypeOptions, isRatesEnabled, delinquencyBucketOptions, repaymentStartDateTypeOptions,
                 advancedPaymentAllocationTransactionTypes, advancedPaymentAllocationFutureInstallmentAllocationRules,
-                advancedPaymentAllocationTypes);
+                advancedPaymentAllocationTypes, LoanScheduleType.getValuesAsEnumOptionDataList(),
+                LoanScheduleProcessingType.getValuesAsEnumOptionDataList());
     }
 
 }

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanproduct/api/LoanProductsApiResourceSwagger.java

@@ -258,9 +258,10 @@ final class LoanProductsApiResourceSwagger {
 
         public AllowAttributeOverrides allowAttributeOverrides;
         public List<RateData> rates;
-
         @Schema(example = "CUMULATIVE")
         public String loanScheduleType;
+        @Schema(example = "HORIZONTAL")
+        public String loanScheduleProcessingType;
 
         static final class AllowAttributeOverrides {
 
@@ -282,8 +283,6 @@ final class LoanProductsApiResourceSwagger {
             public boolean graceOnPrincipalAndInterestPayment;
             @Schema(example = "true")
             public boolean graceOnArrearsAgeing;
-            @Schema(example = "CUMULATIVE")
-            public String loanScheduleType;
         }
 
         static final class ChargeData {
@@ -1043,6 +1042,8 @@ final class LoanProductsApiResourceSwagger {
         public List<EnumOptionData> advancedPaymentAllocationTransactionTypes;
         public List<EnumOptionData> advancedPaymentAllocationFutureInstallmentAllocationRules;
         public List<EnumOptionData> advancedPaymentAllocationTypes;
+        public List<EnumOptionData> loanScheduleTypeOptions;
+        public List<EnumOptionData> loanScheduleProcessingTypeOptions;
     }
 
     @Schema(description = "GetLoanProductsProductIdResponse")
@@ -1263,6 +1264,10 @@ final class LoanProductsApiResourceSwagger {
         public GetLoanProductsRepaymentStartDateType repaymentStartDateType;
         @Schema(example = "false")
         public Boolean disableScheduleExtensionForDownPayment;
+        @Schema(example = "CUMULATIVE")
+        public EnumOptionData loanScheduleType;
+        @Schema(example = "HORIZONTAL")
+        public EnumOptionData loanScheduleProcessingType;
     }
 
     @Schema(description = "PutLoanProductsProductIdRequest")

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanproduct/data/LoanProductData.java

@@ -44,6 +44,8 @@ import org.apache.fineract.portfolio.delinquency.data.DelinquencyBucketData;
 import org.apache.fineract.portfolio.floatingrates.data.FloatingRateData;
 import org.apache.fineract.portfolio.fund.data.FundData;
 import org.apache.fineract.portfolio.loanaccount.data.LoanInterestRecalculationData;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleProcessingType;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleType;
 import org.apache.fineract.portfolio.loanproduct.domain.AmortizationMethod;
 import org.apache.fineract.portfolio.loanproduct.domain.FutureInstallmentAllocationRule;
 import org.apache.fineract.portfolio.loanproduct.domain.InterestCalculationPeriodMethod;
@@ -173,6 +175,8 @@ public class LoanProductData implements Serializable {
     private final List<EnumOptionData> advancedPaymentAllocationTransactionTypes;
     private final List<EnumOptionData> advancedPaymentAllocationFutureInstallmentAllocationRules;
     private final List<EnumOptionData> advancedPaymentAllocationTypes;
+    private final List<EnumOptionData> loanScheduleTypeOptions;
+    private final List<EnumOptionData> loanScheduleProcessingTypeOptions;
 
     private final List<EnumOptionData> interestRecalculationFrequencyTypeOptions;
     private final List<FloatingRateData> floatingRateOptions;
@@ -209,6 +213,9 @@ public class LoanProductData implements Serializable {
     private final boolean disableScheduleExtensionForDownPayment;
     private final boolean enableInstallmentLevelDelinquency;
 
+    private final EnumOptionData loanScheduleType;
+    private final EnumOptionData loanScheduleProcessingType;
+
     /**
      * Used when returning lookup information about loan product for dropdowns.
      */
@@ -304,6 +311,10 @@ public class LoanProductData implements Serializable {
         final EnumOptionData repaymentStartDateType = null;
         final boolean disableScheduleExtensionForDownPayment = false;
         final boolean enableInstallmentLevelDelinquency = false;
+        final EnumOptionData loanScheduleType = null;
+        final EnumOptionData loanScheduleProcessingType = null;
+        final EnumOptionData loanScheduleTypeOptions = null;
+        final EnumOptionData loanScheduleProcessingTypeOptions = null;
 
         return new LoanProductData(id, name, shortName, description, currency, principal, minPrincipal, maxPrincipal, tolerance,
                 numberOfRepayments, minNumberOfRepayments, maxNumberOfRepayments, repaymentEvery, interestRatePerPeriod,
@@ -323,7 +334,8 @@ public class LoanProductData implements Serializable {
                 syncExpectedWithDisbursementDate, canUseForTopup, isEqualAmortization, rateOptions, rates, isRatesEnabled,
                 fixedPrincipalPercentagePerInstallment, delinquencyBucketOptions, delinquencyBucket, dueDaysForRepaymentEvent,
                 overDueDaysForRepaymentEvent, enableDownPayment, disbursedAmountPercentageDownPayment, enableAutoRepaymentForDownPayment,
-                paymentAllocation, repaymentStartDateType, disableScheduleExtensionForDownPayment, enableInstallmentLevelDelinquency);
+                paymentAllocation, repaymentStartDateType, disableScheduleExtensionForDownPayment, enableInstallmentLevelDelinquency,
+                loanScheduleType, loanScheduleProcessingType);
 
     }
 
@@ -420,6 +432,8 @@ public class LoanProductData implements Serializable {
         final EnumOptionData repaymentStartDateType = null;
         final boolean disableScheduleExtensionForDownPayment = false;
         final boolean enableInstallmentLevelDelinquency = false;
+        final EnumOptionData loanScheduleType = null;
+        final EnumOptionData loanScheduleProcessingType = null;
 
         return new LoanProductData(id, name, shortName, description, currency, principal, minPrincipal, maxPrincipal, tolerance,
                 numberOfRepayments, minNumberOfRepayments, maxNumberOfRepayments, repaymentEvery, interestRatePerPeriod,
@@ -439,7 +453,8 @@ public class LoanProductData implements Serializable {
                 syncExpectedWithDisbursementDate, canUseForTopup, isEqualAmortization, rateOptions, rates, isRatesEnabled,
                 fixedPrincipalPercentagePerInstallment, delinquencyBucketOptions, delinquencyBucket, dueDaysForRepaymentEvent,
                 overDueDaysForRepaymentEvent, enableDownPayment, disbursedAmountPercentageDownPayment, enableAutoRepaymentForDownPayment,
-                paymentAllocation, repaymentStartDateType, disableScheduleExtensionForDownPayment, enableInstallmentLevelDelinquency);
+                paymentAllocation, repaymentStartDateType, disableScheduleExtensionForDownPayment, enableInstallmentLevelDelinquency,
+                loanScheduleType, loanScheduleProcessingType);
 
     }
 
@@ -543,6 +558,8 @@ public class LoanProductData implements Serializable {
         final EnumOptionData repaymentStartDateType = LoanEnumerations.repaymentStartDateType(RepaymentStartDateType.DISBURSEMENT_DATE);
         final boolean disableScheduleExtensionForDownPayment = false;
         final boolean enableInstallmentLevelDelinquency = false;
+        final EnumOptionData loanScheduleType = LoanScheduleType.CUMULATIVE.asEnumOptionData();
+        final EnumOptionData loanScheduleProcessingType = LoanScheduleProcessingType.HORIZONTAL.asEnumOptionData();
 
         return new LoanProductData(id, name, shortName, description, currency, principal, minPrincipal, maxPrincipal, tolerance,
                 numberOfRepayments, minNumberOfRepayments, maxNumberOfRepayments, repaymentEvery, interestRatePerPeriod,
@@ -562,7 +579,8 @@ public class LoanProductData implements Serializable {
                 syncExpectedWithDisbursementDate, canUseForTopup, isEqualAmortization, rateOptions, rates, isRatesEnabled,
                 fixedPrincipalPercentagePerInstallment, delinquencyBucketOptions, delinquencyBucket, dueDaysForRepaymentEvent,
                 overDueDaysForRepaymentEvent, enableDownPayment, disbursedAmountPercentageDownPayment, enableAutoRepaymentForDownPayment,
-                paymentAllocation, repaymentStartDateType, disableScheduleExtensionForDownPayment, enableInstallmentLevelDelinquency);
+                paymentAllocation, repaymentStartDateType, disableScheduleExtensionForDownPayment, enableInstallmentLevelDelinquency,
+                loanScheduleType, loanScheduleProcessingType);
 
     }
 
@@ -660,6 +678,8 @@ public class LoanProductData implements Serializable {
         final EnumOptionData repaymentStartDateType = LoanEnumerations.repaymentStartDateType(RepaymentStartDateType.DISBURSEMENT_DATE);
         final boolean disableScheduleExtensionForDownPayment = false;
         final boolean enableInstallmentLevelDelinquency = false;
+        final EnumOptionData loanScheduleType = null;
+        final EnumOptionData loanScheduleProcessingType = null;
 
         return new LoanProductData(id, name, shortName, description, currency, principal, minPrincipal, maxPrincipal, tolerance,
                 numberOfRepayments, minNumberOfRepayments, maxNumberOfRepayments, repaymentEvery, interestRatePerPeriod,
@@ -679,7 +699,8 @@ public class LoanProductData implements Serializable {
                 syncExpectedWithDisbursementDate, canUseForTopup, isEqualAmortization, rateOptions, rates, isRatesEnabled,
                 fixedPrincipalPercentagePerInstallment, delinquencyBucketOptions, delinquencyBucket, dueDaysForRepaymentEvent,
                 overDueDaysForRepaymentEvent, enableDownPayment, disbursedAmountPercentageDownPayment, enableAutoRepaymentForDownPayment,
-                paymentAllocation, repaymentStartDateType, disableScheduleExtensionForDownPayment, enableInstallmentLevelDelinquency);
+                paymentAllocation, repaymentStartDateType, disableScheduleExtensionForDownPayment, enableInstallmentLevelDelinquency,
+                loanScheduleType, loanScheduleProcessingType);
     }
 
     public static LoanProductData withAccountingDetails(final LoanProductData productData, final Map<String, Object> accountingMappings,
@@ -728,7 +749,8 @@ public class LoanProductData implements Serializable {
             final Integer overDueDaysForRepaymentEvent, final boolean enableDownPayment,
             final BigDecimal disbursedAmountPercentageForDownPayment, final boolean enableAutoRepaymentForDownPayment,
             final Collection<AdvancedPaymentData> paymentAllocation, final EnumOptionData repaymentStartDateType,
-            final boolean disableScheduleExtensionForDownPayment, final boolean enableInstallmentLevelDelinquency) {
+            final boolean disableScheduleExtensionForDownPayment, final boolean enableInstallmentLevelDelinquency,
+            final EnumOptionData loanScheduleType, final EnumOptionData loanScheduleProcessingType) {
         this.id = id;
         this.name = name;
         this.shortName = shortName;
@@ -857,6 +879,10 @@ public class LoanProductData implements Serializable {
         this.advancedPaymentAllocationTypes = PaymentAllocationType.getValuesAsEnumOptionDataList();
         this.disableScheduleExtensionForDownPayment = disableScheduleExtensionForDownPayment;
         this.enableInstallmentLevelDelinquency = enableInstallmentLevelDelinquency;
+        this.loanScheduleType = loanScheduleType;
+        this.loanScheduleProcessingType = loanScheduleProcessingType;
+        this.loanScheduleTypeOptions = null;
+        this.loanScheduleProcessingTypeOptions = null;
     }
 
     public LoanProductData(final LoanProductData productData, final Collection<ChargeData> chargeOptions,
@@ -876,7 +902,8 @@ public class LoanProductData implements Serializable {
             final Collection<DelinquencyBucketData> delinquencyBucketOptions, final List<EnumOptionData> repaymentStartDateTypeOptions,
             final List<EnumOptionData> advancedPaymentAllocationTransactionTypes,
             final List<EnumOptionData> advancedPaymentAllocationFutureInstallmentAllocationRules,
-            final List<EnumOptionData> advancedPaymentAllocationTypes) {
+            final List<EnumOptionData> advancedPaymentAllocationTypes, final List<EnumOptionData> loanScheduleTypeOptions,
+            final List<EnumOptionData> loanScheduleProcessingTypeOptions) {
         this.id = productData.id;
         this.name = productData.name;
         this.shortName = productData.shortName;
@@ -1022,6 +1049,10 @@ public class LoanProductData implements Serializable {
         this.advancedPaymentAllocationTypes = advancedPaymentAllocationTypes;
         this.disableScheduleExtensionForDownPayment = productData.disableScheduleExtensionForDownPayment;
         this.enableInstallmentLevelDelinquency = productData.enableInstallmentLevelDelinquency;
+        this.loanScheduleType = productData.getLoanScheduleType();
+        this.loanScheduleProcessingType = productData.getLoanScheduleProcessingType();
+        this.loanScheduleProcessingTypeOptions = loanScheduleProcessingTypeOptions;
+        this.loanScheduleTypeOptions = loanScheduleTypeOptions;
     }
 
     private Collection<ChargeData> nullIfEmpty(final Collection<ChargeData> charges) {

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanproduct/serialization/LoanProductDataValidator.java

@@ -37,6 +37,7 @@ import lombok.extern.slf4j.Slf4j;
 import org.apache.commons.lang3.StringUtils;
 import org.apache.fineract.accounting.common.AccountingConstants.LoanProductAccountingParams;
 import org.apache.fineract.accounting.common.AccountingRuleType;
+import org.apache.fineract.infrastructure.core.api.JsonCommand;
 import org.apache.fineract.infrastructure.core.data.ApiParameterError;
 import org.apache.fineract.infrastructure.core.data.DataValidatorBuilder;
 import org.apache.fineract.infrastructure.core.exception.InvalidJsonException;
@@ -46,14 +47,19 @@ import org.apache.fineract.portfolio.calendar.service.CalendarUtils;
 import org.apache.fineract.portfolio.common.domain.PeriodFrequencyType;
 import org.apache.fineract.portfolio.loanaccount.api.LoanApiConstants;
 import org.apache.fineract.portfolio.loanaccount.domain.LoanRepaymentScheduleTransactionProcessorFactory;
+import org.apache.fineract.portfolio.loanaccount.domain.transactionprocessor.impl.AdvancedPaymentScheduleTransactionProcessor;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleProcessingType;
 import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleType;
 import org.apache.fineract.portfolio.loanproduct.LoanProductConstants;
+import org.apache.fineract.portfolio.loanproduct.domain.AdvancedPaymentAllocationsJsonParser;
+import org.apache.fineract.portfolio.loanproduct.domain.AdvancedPaymentAllocationsValidator;
 import org.apache.fineract.portfolio.loanproduct.domain.AmortizationMethod;
 import org.apache.fineract.portfolio.loanproduct.domain.InterestCalculationPeriodMethod;
 import org.apache.fineract.portfolio.loanproduct.domain.InterestMethod;
 import org.apache.fineract.portfolio.loanproduct.domain.InterestRecalculationCompoundingMethod;
 import org.apache.fineract.portfolio.loanproduct.domain.LoanPreClosureInterestCalculationStrategy;
 import org.apache.fineract.portfolio.loanproduct.domain.LoanProduct;
+import org.apache.fineract.portfolio.loanproduct.domain.LoanProductPaymentAllocationRule;
 import org.apache.fineract.portfolio.loanproduct.domain.LoanProductValueConditionType;
 import org.apache.fineract.portfolio.loanproduct.domain.RecalculationFrequencyType;
 import org.apache.fineract.portfolio.loanproduct.exception.EqualAmortizationUnsupportedFeatureException;
@@ -165,7 +171,7 @@ public final class LoanProductDataValidator {
             LoanProductConstants.ENABLE_DOWN_PAYMENT, LoanProductConstants.DISBURSED_AMOUNT_PERCENTAGE_DOWN_PAYMENT,
             LoanProductConstants.ENABLE_AUTO_REPAYMENT_DOWN_PAYMENT, LoanProductConstants.REPAYMENT_START_DATE_TYPE,
             LoanProductConstants.DISABLE_SCHEDULE_EXTENSION_FOR_DOWN_PAYMENT, LoanProductConstants.ENABLE_INSTALLMENT_LEVEL_DELINQUENCY,
-            LoanProductConstants.LOAN_SCHEDULE_TYPE));
+            LoanProductConstants.LOAN_SCHEDULE_TYPE, LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE));
 
     private static final String[] SUPPORTED_LOAN_CONFIGURABLE_ATTRIBUTES = { LoanProductConstants.amortizationTypeParamName,
             LoanProductConstants.interestTypeParamName, LoanProductConstants.transactionProcessingStrategyCodeParamName,
@@ -179,10 +185,12 @@ public final class LoanProductDataValidator {
     public static final String DOT = ".";
 
     private final FromJsonHelper fromApiJsonHelper;
-
     private final LoanRepaymentScheduleTransactionProcessorFactory loanRepaymentScheduleTransactionProcessorFactory;
+    private final AdvancedPaymentAllocationsJsonParser advancedPaymentAllocationsJsonParser;
+    private final AdvancedPaymentAllocationsValidator advancedPaymentAllocationsValidator;
 
-    public void validateForCreate(final String json) {
+    public void validateForCreate(final JsonCommand command) {
+        String json = command.json();
         if (StringUtils.isBlank(json)) {
             throw new InvalidJsonException();
         }
@@ -777,6 +785,28 @@ public final class LoanProductDataValidator {
         baseDataValidator.reset().parameter(LoanProductConstants.LOAN_SCHEDULE_TYPE).value(loanScheduleType).ignoreIfNull()
                 .isOneOfEnumValues(LoanScheduleType.class);
 
+        String loanScheduleProcessingType = LoanScheduleProcessingType.HORIZONTAL.name();
+        if (this.fromApiJsonHelper.parameterExists(LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE, element)) {
+            loanScheduleProcessingType = this.fromApiJsonHelper.extractStringNamed(LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE,
+                    element);
+            baseDataValidator.reset().parameter(LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE).value(loanScheduleProcessingType)
+                    .ignoreIfNull().isOneOfEnumValues(LoanScheduleProcessingType.class);
+
+            if (LoanScheduleProcessingType.VERTICAL.equals(LoanScheduleProcessingType.valueOf(loanScheduleProcessingType))
+                    && !AdvancedPaymentScheduleTransactionProcessor.ADVANCED_PAYMENT_ALLOCATION_STRATEGY
+                            .equals(transactionProcessingStrategyCode)) {
+                baseDataValidator.reset().parameter(LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE).failWithCode(
+                        "supported.only.for.progressive.loan.schedule.handling",
+                        "Vertical repayment schedule processing is only available with `Advanced payment allocation` strategy");
+            }
+        }
+
+        if (AdvancedPaymentScheduleTransactionProcessor.ADVANCED_PAYMENT_ALLOCATION_STRATEGY.equals(transactionProcessingStrategyCode)
+                && LoanScheduleProcessingType.HORIZONTAL.name().equals(loanScheduleProcessingType)) {
+            advancedPaymentAllocationsValidator.checkGroupingOfAllocationRules(advancedPaymentAllocationsJsonParser
+                    .assembleLoanProductPaymentAllocationRules(command, transactionProcessingStrategyCode));
+        }
+
         throwExceptionIfValidationWarningsExist(dataValidationErrors);
     }
 
@@ -1137,7 +1167,8 @@ public final class LoanProductDataValidator {
                         LoanPreClosureInterestCalculationStrategy.getMinValue(), LoanPreClosureInterestCalculationStrategy.getMaxValue());
     }
 
-    public void validateForUpdate(final String json, final LoanProduct loanProduct) {
+    public void validateForUpdate(final JsonCommand command, final LoanProduct loanProduct) {
+        String json = command.json();
         if (StringUtils.isBlank(json)) {
             throw new InvalidJsonException();
         }
@@ -1247,9 +1278,9 @@ public final class LoanProductDataValidator {
             baseDataValidator.reset().parameter(REPAYMENT_FREQUENCY_TYPE).value(repaymentFrequencyType).notNull().inMinMaxRange(0, 3);
         }
 
+        String transactionProcessingStrategyCode = loanProduct.getTransactionProcessingStrategyCode();
         if (this.fromApiJsonHelper.parameterExists(TRANSACTION_PROCESSING_STRATEGY_CODE, element)) {
-            final String transactionProcessingStrategyCode = this.fromApiJsonHelper.extractStringNamed(TRANSACTION_PROCESSING_STRATEGY_CODE,
+            transactionProcessingStrategyCode = this.fromApiJsonHelper.extractStringNamed(TRANSACTION_PROCESSING_STRATEGY_CODE, element);
-                    element);
             baseDataValidator.reset().parameter(TRANSACTION_PROCESSING_STRATEGY_CODE).value(transactionProcessingStrategyCode).notBlank();
             // Validating whether the processor is existing
             loanRepaymentScheduleTransactionProcessorFactory.determineProcessor(transactionProcessingStrategyCode);
@@ -1753,6 +1784,39 @@ public final class LoanProductDataValidator {
                     .value(enableInstallmentLevelDelinquency).ignoreIfNull().validateForBooleanValue();
         }
 
+        if (this.fromApiJsonHelper.parameterExists(LoanProductConstants.LOAN_SCHEDULE_TYPE, element)) {
+            final String loanScheduleType = this.fromApiJsonHelper.extractStringNamed(LoanProductConstants.LOAN_SCHEDULE_TYPE, element);
+            baseDataValidator.reset().parameter(LoanProductConstants.LOAN_SCHEDULE_TYPE).value(loanScheduleType).ignoreIfNull()
+                    .isOneOfEnumValues(LoanScheduleType.class);
+        }
+
+        String loanScheduleProcessingType = loanProduct.getLoanProductRelatedDetail().getLoanScheduleProcessingType().name();
+        if (this.fromApiJsonHelper.parameterExists(LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE, element)) {
+            loanScheduleProcessingType = this.fromApiJsonHelper.extractStringNamed(LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE,
+                    element);
+            baseDataValidator.reset().parameter(LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE).value(loanScheduleProcessingType)
+                    .ignoreIfNull().isOneOfEnumValues(LoanScheduleProcessingType.class);
+        }
+
+        List<LoanProductPaymentAllocationRule> allocationRules = loanProduct.getPaymentAllocationRules();
+        if (this.fromApiJsonHelper.parameterExists(ADVANCED_PAYMENT_ALLOCATIONS, element)
+                && LoanScheduleProcessingType.HORIZONTAL.name().equals(loanScheduleProcessingType)) {
+            allocationRules = advancedPaymentAllocationsJsonParser.assembleLoanProductPaymentAllocationRules(command,
+                    transactionProcessingStrategyCode);
+        }
+
+        if (LoanScheduleProcessingType.HORIZONTAL.name().equals(loanScheduleProcessingType)
+                && AdvancedPaymentScheduleTransactionProcessor.ADVANCED_PAYMENT_ALLOCATION_STRATEGY
+                        .equals(transactionProcessingStrategyCode)) {
+            advancedPaymentAllocationsValidator.checkGroupingOfAllocationRules(allocationRules);
+        }
+        if (LoanScheduleProcessingType.VERTICAL.equals(LoanScheduleProcessingType.valueOf(loanScheduleProcessingType))
+                && !AdvancedPaymentScheduleTransactionProcessor.ADVANCED_PAYMENT_ALLOCATION_STRATEGY
+                        .equals(transactionProcessingStrategyCode)) {
+            baseDataValidator.reset().parameter(LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE).failWithCode(
+                    "supported.only.for.progressive.loan.schedule.handling",
+                    "Vertical repayment schedule processing is only available with `Advanced payment allocation` strategy");
+        }
         throwExceptionIfValidationWarningsExist(dataValidationErrors);
     }
 

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanproduct/service/LoanProductReadPlatformServiceImpl.java

@@ -43,6 +43,8 @@ import org.apache.fineract.portfolio.charge.service.ChargeReadPlatformService;
 import org.apache.fineract.portfolio.common.service.CommonEnumerations;
 import org.apache.fineract.portfolio.delinquency.data.DelinquencyBucketData;
 import org.apache.fineract.portfolio.delinquency.service.DelinquencyReadPlatformService;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleProcessingType;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleType;
 import org.apache.fineract.portfolio.loanproduct.data.AdvancedPaymentData;
 import org.apache.fineract.portfolio.loanproduct.data.AdvancedPaymentData.PaymentAllocationOrder;
 import org.apache.fineract.portfolio.loanproduct.data.LoanProductBorrowerCycleVariationData;
@@ -260,7 +262,7 @@ public class LoanProductReadPlatformServiceImpl implements LoanProductReadPlatfo
                     + "lfr.is_floating_interest_rate_calculation_allowed as isFloatingInterestRateCalculationAllowed, "
                     + "lp.allow_variabe_installments as isVariableIntallmentsAllowed, " + "lvi.minimum_gap as minimumGap, "
                     + "lvi.maximum_gap as maximumGap, dbuc.id as delinquencyBucketId, dbuc.name as delinquencyBucketName, "
-                    + "lp.can_use_for_topup as canUseForTopup, lp.is_equal_amortization as isEqualAmortization "
+                    + "lp.can_use_for_topup as canUseForTopup, lp.is_equal_amortization as isEqualAmortization, lp.loan_schedule_type as loanScheduleType, lp.loan_schedule_processing_type as loanScheduleProcessingType  "
                     + " from m_product_loan lp " + " left join m_fund f on f.id = lp.fund_id "
                     + " left join m_product_loan_recalculation_details lpr on lpr.product_id=lp.id "
                     + " left join m_product_loan_guarantee_details lpg on lpg.loan_product_id=lp.id "
@@ -505,6 +507,11 @@ public class LoanProductReadPlatformServiceImpl implements LoanProductReadPlatfo
             final DelinquencyBucketData delinquencyBucket = new DelinquencyBucketData(delinquencyBucketId, delinquencyBucketName,
                     new ArrayList<>());
 
+            final String loanScheduleTypeStr = rs.getString("loanScheduleType");
+            final LoanScheduleType loanScheduleType = LoanScheduleType.valueOf(loanScheduleTypeStr);
+            final String loanScheduleProcessingTypeStr = rs.getString("loanScheduleProcessingType");
+            final LoanScheduleProcessingType loanScheduleProcessingType = LoanScheduleProcessingType.valueOf(loanScheduleProcessingTypeStr);
+
             return new LoanProductData(id, name, shortName, description, currency, principal, minPrincipal, maxPrincipal, tolerance,
                     numberOfRepayments, minNumberOfRepayments, maxNumberOfRepayments, repaymentEvery, interestRatePerPeriod,
                     minInterestRatePerPeriod, maxInterestRatePerPeriod, annualInterestRate, repaymentFrequencyType,
@@ -525,7 +532,7 @@ public class LoanProductReadPlatformServiceImpl implements LoanProductReadPlatfo
                     isRatesEnabled, fixedPrincipalPercentagePerInstallment, delinquencyBucketOptions, delinquencyBucket,
                     dueDaysForRepaymentEvent, overDueDaysForRepaymentEvent, enableDownPayment, disbursedAmountPercentageForDownPayment,
                     enableAutoRepaymentForDownPayment, advancedPaymentData, repaymentStartDateType, disableScheduleExtensionForDownPayment,
-                    enableInstallmentLevelDelinquency);
+                    enableInstallmentLevelDelinquency, loanScheduleType.asEnumOptionData(), loanScheduleProcessingType.asEnumOptionData());
         }
     }
 

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanproduct/service/LoanProductWritePlatformServiceJpaRepositoryImpl.java

@@ -97,7 +97,7 @@ public class LoanProductWritePlatformServiceJpaRepositoryImpl implements LoanPro
 
             this.context.authenticatedUser();
 
-            this.fromApiJsonDeserializer.validateForCreate(command.json());
+            this.fromApiJsonDeserializer.validateForCreate(command);
             validateInputDates(command);
 
             final Fund fund = findFundByIdIfProvided(command.longValueOfParameterNamed("fundId"));
@@ -172,7 +172,7 @@ public class LoanProductWritePlatformServiceJpaRepositoryImpl implements LoanPro
             final LoanProduct product = this.loanProductRepository.findById(loanProductId)
                     .orElseThrow(() -> new LoanProductNotFoundException(loanProductId));
 
-            this.fromApiJsonDeserializer.validateForUpdate(command.json(), product);
+            this.fromApiJsonDeserializer.validateForUpdate(command, product);
             validateInputDates(command);
 
             if (anyChangeInCriticalFloatingRateLinkedParams(command, product)

fineract-provider/src/test/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/impl/AdvancedPaymentScheduleTransactionProcessorTest.java

@@ -43,6 +43,8 @@ import org.apache.fineract.portfolio.loanaccount.domain.LoanPaymentAllocationRul
 import org.apache.fineract.portfolio.loanaccount.domain.LoanRepaymentScheduleInstallment;
 import org.apache.fineract.portfolio.loanaccount.domain.LoanTransaction;
 import org.apache.fineract.portfolio.loanaccount.domain.LoanTransactionType;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleProcessingType;
+import org.apache.fineract.portfolio.loanproduct.domain.LoanProductRelatedDetail;
 import org.apache.fineract.portfolio.loanproduct.domain.PaymentAllocationTransactionType;
 import org.apache.fineract.portfolio.loanproduct.domain.PaymentAllocationType;
 import org.junit.jupiter.api.AfterAll;
@@ -182,6 +184,7 @@ class AdvancedPaymentScheduleTransactionProcessorTest {
         Money overpaidAmount = Money.zero(currency);
         Money zero = Money.zero(currency);
         Loan loan = Mockito.mock(Loan.class);
+        LoanProductRelatedDetail loanProductRelatedDetail = Mockito.mock(LoanProductRelatedDetail.class);
         Money chargeAmountMoney = Money.of(currency, chargeAmount);
         BigDecimal transactionAmount = BigDecimal.valueOf(120.00);
         Money transactionAmountMoney = Money.of(currency, transactionAmount);
@@ -198,6 +201,8 @@ class AdvancedPaymentScheduleTransactionProcessorTest {
         Mockito.when(loanTransaction.getTransactionDate()).thenReturn(transactionDate);
         Mockito.when(charge.getAmountOutstanding(currency)).thenReturn(chargeAmountMoney);
         Mockito.when(loanTransaction.getLoan()).thenReturn(loan);
+        Mockito.when(loanTransaction.getLoan().getLoanProductRelatedDetail()).thenReturn(loanProductRelatedDetail);
+        Mockito.when(loanProductRelatedDetail.getLoanScheduleProcessingType()).thenReturn(LoanScheduleProcessingType.HORIZONTAL);
         Mockito.when(loan.getDisbursementDate()).thenReturn(disbursementDate);
         Mockito.when(installment.isFirstPeriod()).thenReturn(true);
         Mockito.when(charge.isDueForCollectionFromIncludingAndUpToAndIncluding(disbursementDate, installment.getDueDate()))

fineract-provider/src/test/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/DefaultScheduledDateGeneratorTest.java

@@ -123,7 +123,7 @@ public class DefaultScheduledDateGeneratorTest {
                 null, null, null, null, null, Money.of(fromApplicationCurrency(dollarCurrency), ZERO), false, null, EMPTY_LIST,
                 BigDecimal.valueOf(36_000L), null, DaysInMonthType.ACTUAL, DaysInYearType.ACTUAL, false, null, null, null, null, null, ZERO,
                 null, NONE, null, ZERO, EMPTY_LIST, true, 0, false, holidayDetailDTO, false, false, false, null, false, false, null, false,
-                DISBURSEMENT_DATE, submittedOnDate, false, CUMULATIVE);
+                DISBURSEMENT_DATE, submittedOnDate, false, CUMULATIVE, LoanScheduleProcessingType.HORIZONTAL);
     }
 
     private HolidayDetailDTO createHolidayDTO() {

integration-tests/src/test/java/org/apache/fineract/integrationtests/AdvancedPaymentAllocationLoanRepaymentScheduleTest.java

@@ -20,6 +20,7 @@ package org.apache.fineract.integrationtests;
 
 import static org.junit.jupiter.api.Assertions.assertEquals;
 import static org.junit.jupiter.api.Assertions.assertNotNull;
+import static org.junit.jupiter.api.Assertions.assertThrows;
 import static org.junit.jupiter.api.Assertions.assertTrue;
 
 import io.restassured.builder.RequestSpecBuilder;
@@ -29,10 +30,13 @@ import io.restassured.specification.RequestSpecification;
 import io.restassured.specification.ResponseSpecification;
 import java.math.BigDecimal;
 import java.time.LocalDate;
+import java.util.ArrayList;
 import java.util.Arrays;
+import java.util.HashMap;
 import java.util.List;
 import java.util.Objects;
 import java.util.concurrent.atomic.AtomicInteger;
+import java.util.stream.Collectors;
 import org.apache.fineract.client.models.AdvancedPaymentData;
 import org.apache.fineract.client.models.BusinessDateRequest;
 import org.apache.fineract.client.models.GetLoansLoanIdRepaymentPeriod;
@@ -47,9 +51,11 @@ import org.apache.fineract.client.models.PostLoansLoanIdTransactionsTransactionI
 import org.apache.fineract.client.models.PostLoansRequest;
 import org.apache.fineract.client.models.PostLoansResponse;
 import org.apache.fineract.client.models.PostUpdateRescheduleLoansRequest;
+import org.apache.fineract.client.util.CallFailedRuntimeException;
 import org.apache.fineract.infrastructure.businessdate.domain.BusinessDateType;
 import org.apache.fineract.integrationtests.common.BusinessDateHelper;
 import org.apache.fineract.integrationtests.common.ClientHelper;
+import org.apache.fineract.integrationtests.common.CommonConstants;
 import org.apache.fineract.integrationtests.common.GlobalConfigurationHelper;
 import org.apache.fineract.integrationtests.common.LoanRescheduleRequestHelper;
 import org.apache.fineract.integrationtests.common.Utils;
@@ -60,6 +66,8 @@ import org.apache.fineract.integrationtests.common.loans.LoanProductTestBuilder;
 import org.apache.fineract.integrationtests.common.loans.LoanTestLifecycleExtension;
 import org.apache.fineract.integrationtests.common.loans.LoanTransactionHelper;
 import org.apache.fineract.portfolio.loanaccount.domain.transactionprocessor.impl.AdvancedPaymentScheduleTransactionProcessor;
+import org.apache.fineract.portfolio.loanaccount.domain.transactionprocessor.impl.FineractStyleLoanRepaymentScheduleTransactionProcessor;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleProcessingType;
 import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleType;
 import org.apache.fineract.portfolio.loanproduct.domain.PaymentAllocationType;
 import org.junit.jupiter.api.BeforeAll;
@@ -101,7 +109,8 @@ public class AdvancedPaymentAllocationLoanRepaymentScheduleTest {
         final Account expenseAccount = accountHelper.createExpenseAccount();
         final Account overpaymentAccount = accountHelper.createLiabilityAccount();
 
-        commonLoanProductId = createLoanProduct("500", "15", "4", true, assetAccount, incomeAccount, expenseAccount, overpaymentAccount);
+        commonLoanProductId = createLoanProduct("500", "15", "4", true, LoanScheduleType.PROGRESSIVE, LoanScheduleProcessingType.HORIZONTAL,
+                assetAccount, incomeAccount, expenseAccount, overpaymentAccount);
         client = clientHelper.createClient(ClientHelper.defaultClientCreationRequest());
     }
 
@@ -1739,8 +1748,8 @@ public class AdvancedPaymentAllocationLoanRepaymentScheduleTest {
             final Account incomeAccount = accountHelper.createIncomeAccount();
             final Account expenseAccount = accountHelper.createExpenseAccount();
             final Account overpaymentAccount = accountHelper.createLiabilityAccount();
-            Integer localLoanProductId = createLoanProduct("500", "15", "4", false, assetAccount, incomeAccount, expenseAccount,
+            Integer localLoanProductId = createLoanProduct("500", "15", "4", false, LoanScheduleType.PROGRESSIVE,
-                    overpaymentAccount);
+                    LoanScheduleProcessingType.HORIZONTAL, assetAccount, incomeAccount, expenseAccount, overpaymentAccount);
             final PostLoansResponse loanResponse = applyForLoanApplication(client.getClientId(), localLoanProductId, 500L, 45, 15, 3, 0,
                     "01 January 2023", "01 January 2023");
 
@@ -1824,8 +1833,8 @@ public class AdvancedPaymentAllocationLoanRepaymentScheduleTest {
             final Account incomeAccount = accountHelper.createIncomeAccount();
             final Account expenseAccount = accountHelper.createExpenseAccount();
             final Account overpaymentAccount = accountHelper.createLiabilityAccount();
-            Integer localLoanProductId = createLoanProduct("500", "15", "4", false, assetAccount, incomeAccount, expenseAccount,
+            Integer localLoanProductId = createLoanProduct("500", "15", "4", false, LoanScheduleType.PROGRESSIVE,
-                    overpaymentAccount);
+                    LoanScheduleProcessingType.HORIZONTAL, assetAccount, incomeAccount, expenseAccount, overpaymentAccount);
             final PostLoansResponse loanResponse = applyForLoanApplication(client.getClientId(), localLoanProductId, 500L, 45, 15, 3, 0,
                     "01 January 2023", "01 January 2023");
 
@@ -1904,6 +1913,318 @@ public class AdvancedPaymentAllocationLoanRepaymentScheduleTest {
         }
     }
 
+    // UC103: Advanced payment allocation, add charge after maturity -> N+1 installment, repay the loan
+    // ADVANCED_PAYMENT_ALLOCATION_STRATEGY
+    // 1. Disburse the loan (500)
+    // 2. Add charge after maturity date
+    // 3. Fully repay the loan
+    @Test
+    public void uc103() {
+        try {
+
+            GlobalConfigurationHelper.updateIsBusinessDateEnabled(requestSpec, responseSpec, Boolean.TRUE);
+            businessDateHelper.updateBusinessDate(new BusinessDateRequest().type(BusinessDateType.BUSINESS_DATE.getName())
+                    .date("2023.02.22").dateFormat("yyyy.MM.dd").locale("en"));
+
+            final Account assetAccount = accountHelper.createAssetAccount();
+            final Account incomeAccount = accountHelper.createIncomeAccount();
+            final Account expenseAccount = accountHelper.createExpenseAccount();
+            final Account overpaymentAccount = accountHelper.createLiabilityAccount();
+            Integer localLoanProductId = createLoanProduct("500", "15", "4", false, LoanScheduleType.PROGRESSIVE,
+                    LoanScheduleProcessingType.HORIZONTAL, assetAccount, incomeAccount, expenseAccount, overpaymentAccount);
+            final PostLoansResponse loanResponse = applyForLoanApplication(client.getClientId(), localLoanProductId, 500L, 45, 15, 3, 0,
+                    "01 January 2023", "01 January 2023");
+
+            loanTransactionHelper.approveLoan(loanResponse.getLoanId(),
+                    new PostLoansLoanIdRequest().approvedLoanAmount(BigDecimal.valueOf(500)).dateFormat(DATETIME_PATTERN)
+                            .approvedOnDate("01 January 2023").locale("en"));
+
+            loanTransactionHelper.disburseLoan(loanResponse.getLoanId(),
+                    new PostLoansLoanIdRequest().actualDisbursementDate("01 January 2023").dateFormat(DATETIME_PATTERN)
+                            .transactionAmount(BigDecimal.valueOf(500.00)).locale("en"));
+
+            GetLoansLoanIdResponse loanDetails = loanTransactionHelper.getLoanDetails(loanResponse.getLoanId());
+            validateLoanSummaryBalances(loanDetails, 500.0, 0.0, 500.0, 0.0, null);
+            validateRepaymentPeriod(loanDetails, 1, LocalDate.of(2023, 1, 1), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 2, LocalDate.of(2023, 1, 16), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 3, LocalDate.of(2023, 1, 31), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 4, LocalDate.of(2023, 2, 15), 125.0, 0.0, 125.0, 0.0, 0.0);
+            assertTrue(loanDetails.getStatus().getActive());
+
+            // Add Charge Penalty
+            Integer penalty = ChargesHelper.createCharges(requestSpec, responseSpec,
+                    ChargesHelper.getLoanSpecifiedDueDateJSON(ChargesHelper.CHARGE_CALCULATION_TYPE_FLAT, "100", true));
+            Integer penalty1LoanChargeId = loanTransactionHelper.addChargesForLoan(loanResponse.getLoanId().intValue(),
+                    LoanTransactionHelper.getSpecifiedDueDateChargesForLoanAsJSON(String.valueOf(penalty), "22 February 2023", "100"));
+            assertNotNull(penalty1LoanChargeId);
+
+            loanDetails = loanTransactionHelper.getLoanDetails(loanResponse.getLoanId());
+            validateLoanSummaryBalances(loanDetails, 600.0, 0.0, 500.0, 0.0, null);
+            validateRepaymentPeriod(loanDetails, 1, LocalDate.of(2023, 1, 1), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 2, LocalDate.of(2023, 1, 16), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 3, LocalDate.of(2023, 1, 31), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 4, LocalDate.of(2023, 2, 15), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 5, LocalDate.of(2023, 2, 22), 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 100.0, 0.0, 100.0, 0.0, 0.0,
+                    0.0, 0.0, 0.0);
+            assertTrue(loanDetails.getStatus().getActive());
+
+            loanTransactionHelper.makeLoanRepayment(loanResponse.getLoanId(), new PostLoansLoanIdTransactionsRequest()
+                    .dateFormat(DATETIME_PATTERN).transactionDate("22 February 2023").locale("en").transactionAmount(600.0));
+            loanDetails = loanTransactionHelper.getLoanDetails(loanResponse.getLoanId());
+            validateLoanSummaryBalances(loanDetails, 0.0, 600.0, 0.0, 500.0, null);
+            validateRepaymentPeriod(loanDetails, 1, LocalDate.of(2023, 1, 1), 125.0, 125.0, 0.0, 0.0, 125.0);
+            validateRepaymentPeriod(loanDetails, 2, LocalDate.of(2023, 1, 16), 125.0, 125.0, 0.0, 0.0, 125.0);
+            validateRepaymentPeriod(loanDetails, 3, LocalDate.of(2023, 1, 31), 125.0, 125.0, 0.0, 0.0, 125.0);
+            validateRepaymentPeriod(loanDetails, 4, LocalDate.of(2023, 2, 15), 125.0, 125.0, 0.0, 0.0, 125.0);
+            validateRepaymentPeriod(loanDetails, 5, LocalDate.of(2023, 2, 22), 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 100.0, 100.0, 0.0, 0.0, 0.0,
+                    0.0, 0.0, 0.0);
+            assertTrue(loanDetails.getStatus().getClosedObligationsMet());
+        } finally {
+            GlobalConfigurationHelper.updateIsBusinessDateEnabled(requestSpec, responseSpec, Boolean.FALSE);
+        }
+    }
+
+    // UC104: Advanced payment allocation, horizontal repayment processing
+    // ADVANCED_PAYMENT_ALLOCATION_STRATEGY
+    // 1. Disburse the loan (500)
+    // 2. Add charge for 3rd and 4th installments
+    // 3. Pay little more than the charge of 1st installment
+    // 4. Pay little more than the principal of 1st installment and charge of 2nd installment
+    @Test
+    public void uc104() {
+        try {
+
+            GlobalConfigurationHelper.updateIsBusinessDateEnabled(requestSpec, responseSpec, Boolean.TRUE);
+            businessDateHelper.updateBusinessDate(new BusinessDateRequest().type(BusinessDateType.BUSINESS_DATE.getName())
+                    .date("2023.02.22").dateFormat("yyyy.MM.dd").locale("en"));
+
+            final Account assetAccount = accountHelper.createAssetAccount();
+            final Account incomeAccount = accountHelper.createIncomeAccount();
+            final Account expenseAccount = accountHelper.createExpenseAccount();
+            final Account overpaymentAccount = accountHelper.createLiabilityAccount();
+            Integer localLoanProductId = createLoanProduct("500", "15", "4", false, LoanScheduleType.PROGRESSIVE,
+                    LoanScheduleProcessingType.HORIZONTAL, assetAccount, incomeAccount, expenseAccount, overpaymentAccount);
+            final PostLoansResponse loanResponse = applyForLoanApplication(client.getClientId(), localLoanProductId, 500L, 45, 15, 3, 0,
+                    "01 January 2023", "01 January 2023");
+
+            loanTransactionHelper.approveLoan(loanResponse.getLoanId(),
+                    new PostLoansLoanIdRequest().approvedLoanAmount(BigDecimal.valueOf(500)).dateFormat(DATETIME_PATTERN)
+                            .approvedOnDate("01 January 2023").locale("en"));
+
+            loanTransactionHelper.disburseLoan(loanResponse.getLoanId(),
+                    new PostLoansLoanIdRequest().actualDisbursementDate("01 January 2023").dateFormat(DATETIME_PATTERN)
+                            .transactionAmount(BigDecimal.valueOf(500.00)).locale("en"));
+
+            GetLoansLoanIdResponse loanDetails = loanTransactionHelper.getLoanDetails(loanResponse.getLoanId());
+            validateLoanSummaryBalances(loanDetails, 500.0, 0.0, 500.0, 0.0, null);
+            validateRepaymentPeriod(loanDetails, 1, LocalDate.of(2023, 1, 1), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 2, LocalDate.of(2023, 1, 16), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 3, LocalDate.of(2023, 1, 31), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 4, LocalDate.of(2023, 2, 15), 125.0, 0.0, 125.0, 0.0, 0.0);
+            assertTrue(loanDetails.getStatus().getActive());
+
+            // Add Charge Penalty
+            Integer penalty = ChargesHelper.createCharges(requestSpec, responseSpec,
+                    ChargesHelper.getLoanSpecifiedDueDateJSON(ChargesHelper.CHARGE_CALCULATION_TYPE_FLAT, "25", true));
+            loanTransactionHelper.addChargesForLoan(loanResponse.getLoanId().intValue(),
+                    LoanTransactionHelper.getSpecifiedDueDateChargesForLoanAsJSON(String.valueOf(penalty), "20 January 2023", "25"));
+            loanTransactionHelper.addChargesForLoan(loanResponse.getLoanId().intValue(),
+                    LoanTransactionHelper.getSpecifiedDueDateChargesForLoanAsJSON(String.valueOf(penalty), "10 February 2023", "25"));
+
+            loanDetails = loanTransactionHelper.getLoanDetails(loanResponse.getLoanId());
+            validateLoanSummaryBalances(loanDetails, 550.0, 0.0, 500.0, 0.0, null);
+            validateRepaymentPeriod(loanDetails, 1, LocalDate.of(2023, 1, 1), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 2, LocalDate.of(2023, 1, 16), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 3, LocalDate.of(2023, 1, 31), 125.0, 0.0, 125.0, 0.0, 0.0, 0.0, 25.0, 0.0, 25.0, 0.0, 0.0,
+                    0.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 4, LocalDate.of(2023, 2, 15), 125.0, 0.0, 125.0, 0.0, 0.0, 0.0, 25.0, 0.0, 25.0, 0.0, 0.0,
+                    0.0, 0.0, 0.0);
+            assertTrue(loanDetails.getStatus().getActive());
+
+            loanTransactionHelper.makeLoanRepayment(loanResponse.getLoanId(), new PostLoansLoanIdTransactionsRequest()
+                    .dateFormat(DATETIME_PATTERN).transactionDate("22 February 2023").locale("en").transactionAmount(260.0));
+            loanDetails = loanTransactionHelper.getLoanDetails(loanResponse.getLoanId());
+            validateLoanSummaryBalances(loanDetails, 290.0, 260.0, 250.0, 250.0, null);
+            validateRepaymentPeriod(loanDetails, 1, LocalDate.of(2023, 1, 1), 125.0, 125.0, 0.0, 0.0, 125.0);
+            validateRepaymentPeriod(loanDetails, 2, LocalDate.of(2023, 1, 16), 125.0, 125.0, 0.0, 0.0, 125.0);
+            validateRepaymentPeriod(loanDetails, 3, LocalDate.of(2023, 1, 31), 125.0, 0.0, 125.0, 0.0, 0.0, 0.0, 25.0, 10.0, 15.0, 0.0, 0.0,
+                    0.0, 0.0, 10.0);
+            validateRepaymentPeriod(loanDetails, 4, LocalDate.of(2023, 2, 15), 125.0, 0.0, 125.0, 0.0, 0.0, 0.0, 25.0, 0.0, 25.0, 0.0, 0.0,
+                    0.0, 0.0, 0.0);
+            assertTrue(loanDetails.getStatus().getActive());
+
+            loanTransactionHelper.makeLoanRepayment(loanResponse.getLoanId(), new PostLoansLoanIdTransactionsRequest()
+                    .dateFormat(DATETIME_PATTERN).transactionDate("22 February 2023").locale("en").transactionAmount(26.0));
+            loanDetails = loanTransactionHelper.getLoanDetails(loanResponse.getLoanId());
+            validateLoanSummaryBalances(loanDetails, 264.0, 286.0, 239.0, 261.0, null);
+            validateRepaymentPeriod(loanDetails, 1, LocalDate.of(2023, 1, 1), 125.0, 125.0, 0.0, 0.0, 125.0);
+            validateRepaymentPeriod(loanDetails, 2, LocalDate.of(2023, 1, 16), 125.0, 125.0, 0.0, 0.0, 125.0);
+            validateRepaymentPeriod(loanDetails, 3, LocalDate.of(2023, 1, 31), 125.0, 11.0, 114.0, 0.0, 0.0, 0.0, 25.0, 25.0, 0.0, 0.0, 0.0,
+                    0.0, 0.0, 36.0);
+            validateRepaymentPeriod(loanDetails, 4, LocalDate.of(2023, 2, 15), 125.0, 0.0, 125.0, 0.0, 0.0, 0.0, 25.0, 0.0, 25.0, 0.0, 0.0,
+                    0.0, 0.0, 0.0);
+            assertTrue(loanDetails.getStatus().getActive());
+        } finally {
+            GlobalConfigurationHelper.updateIsBusinessDateEnabled(requestSpec, responseSpec, Boolean.FALSE);
+        }
+    }
+
+    // UC105: Advanced payment allocation, vertical repayment processing
+    // ADVANCED_PAYMENT_ALLOCATION_STRATEGY
+    // 1. Disburse the loan (500)
+    // 2. Add charge for 3rd and 4th installments
+    // 3. Pay little more than the charge of 1st installment
+    // 4. Pay little more than the charges
+    @Test
+    public void uc105() {
+        try {
+
+            GlobalConfigurationHelper.updateIsBusinessDateEnabled(requestSpec, responseSpec, Boolean.TRUE);
+            businessDateHelper.updateBusinessDate(new BusinessDateRequest().type(BusinessDateType.BUSINESS_DATE.getName())
+                    .date("2023.02.22").dateFormat("yyyy.MM.dd").locale("en"));
+
+            final Account assetAccount = accountHelper.createAssetAccount();
+            final Account incomeAccount = accountHelper.createIncomeAccount();
+            final Account expenseAccount = accountHelper.createExpenseAccount();
+            final Account overpaymentAccount = accountHelper.createLiabilityAccount();
+            Integer localLoanProductId = createLoanProduct("500", "15", "4", false, LoanScheduleType.PROGRESSIVE,
+                    LoanScheduleProcessingType.VERTICAL, assetAccount, incomeAccount, expenseAccount, overpaymentAccount);
+            final PostLoansResponse loanResponse = applyForLoanApplication(client.getClientId(), localLoanProductId, 500L, 45, 15, 3, 0,
+                    "01 January 2023", "01 January 2023");
+
+            loanTransactionHelper.approveLoan(loanResponse.getLoanId(),
+                    new PostLoansLoanIdRequest().approvedLoanAmount(BigDecimal.valueOf(500)).dateFormat(DATETIME_PATTERN)
+                            .approvedOnDate("01 January 2023").locale("en"));
+
+            loanTransactionHelper.disburseLoan(loanResponse.getLoanId(),
+                    new PostLoansLoanIdRequest().actualDisbursementDate("01 January 2023").dateFormat(DATETIME_PATTERN)
+                            .transactionAmount(BigDecimal.valueOf(500.00)).locale("en"));
+
+            GetLoansLoanIdResponse loanDetails = loanTransactionHelper.getLoanDetails(loanResponse.getLoanId());
+            validateLoanSummaryBalances(loanDetails, 500.0, 0.0, 500.0, 0.0, null);
+            validateRepaymentPeriod(loanDetails, 1, LocalDate.of(2023, 1, 1), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 2, LocalDate.of(2023, 1, 16), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 3, LocalDate.of(2023, 1, 31), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 4, LocalDate.of(2023, 2, 15), 125.0, 0.0, 125.0, 0.0, 0.0);
+            assertTrue(loanDetails.getStatus().getActive());
+
+            // Add Charge Penalty
+            Integer penalty = ChargesHelper.createCharges(requestSpec, responseSpec,
+                    ChargesHelper.getLoanSpecifiedDueDateJSON(ChargesHelper.CHARGE_CALCULATION_TYPE_FLAT, "25", true));
+            loanTransactionHelper.addChargesForLoan(loanResponse.getLoanId().intValue(),
+                    LoanTransactionHelper.getSpecifiedDueDateChargesForLoanAsJSON(String.valueOf(penalty), "20 January 2023", "25"));
+            loanTransactionHelper.addChargesForLoan(loanResponse.getLoanId().intValue(),
+                    LoanTransactionHelper.getSpecifiedDueDateChargesForLoanAsJSON(String.valueOf(penalty), "10 February 2023", "25"));
+
+            loanDetails = loanTransactionHelper.getLoanDetails(loanResponse.getLoanId());
+            validateLoanSummaryBalances(loanDetails, 550.0, 0.0, 500.0, 0.0, null);
+            validateRepaymentPeriod(loanDetails, 1, LocalDate.of(2023, 1, 1), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 2, LocalDate.of(2023, 1, 16), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 3, LocalDate.of(2023, 1, 31), 125.0, 0.0, 125.0, 0.0, 0.0, 0.0, 25.0, 0.0, 25.0, 0.0, 0.0,
+                    0.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 4, LocalDate.of(2023, 2, 15), 125.0, 0.0, 125.0, 0.0, 0.0, 0.0, 25.0, 0.0, 25.0, 0.0, 0.0,
+                    0.0, 0.0, 0.0);
+            assertTrue(loanDetails.getStatus().getActive());
+
+            loanTransactionHelper.makeLoanRepayment(loanResponse.getLoanId(), new PostLoansLoanIdTransactionsRequest()
+                    .dateFormat(DATETIME_PATTERN).transactionDate("22 February 2023").locale("en").transactionAmount(26.0));
+            loanDetails = loanTransactionHelper.getLoanDetails(loanResponse.getLoanId());
+            validateLoanSummaryBalances(loanDetails, 524.0, 26.0, 500.0, 0.0, null);
+            validateRepaymentPeriod(loanDetails, 1, LocalDate.of(2023, 1, 1), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 2, LocalDate.of(2023, 1, 16), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 3, LocalDate.of(2023, 1, 31), 125.0, 0.0, 125.0, 0.0, 0.0, 0.0, 25.0, 25.0, 0.0, 0.0, 0.0,
+                    0.0, 0.0, 25.0);
+            validateRepaymentPeriod(loanDetails, 4, LocalDate.of(2023, 2, 15), 125.0, 0.0, 125.0, 0.0, 0.0, 0.0, 25.0, 1.0, 24.0, 0.0, 0.0,
+                    0.0, 0.0, 1.0);
+            assertTrue(loanDetails.getStatus().getActive());
+
+            loanTransactionHelper.makeLoanRepayment(loanResponse.getLoanId(), new PostLoansLoanIdTransactionsRequest()
+                    .dateFormat(DATETIME_PATTERN).transactionDate("22 February 2023").locale("en").transactionAmount(26.0));
+            loanDetails = loanTransactionHelper.getLoanDetails(loanResponse.getLoanId());
+            validateLoanSummaryBalances(loanDetails, 498.0, 52.0, 498.0, 2.0, null);
+            validateRepaymentPeriod(loanDetails, 1, LocalDate.of(2023, 1, 1), 125.0, 2.0, 123.0, 0.0, 2.0);
+            validateRepaymentPeriod(loanDetails, 2, LocalDate.of(2023, 1, 16), 125.0, 0.0, 125.0, 0.0, 0.0);
+            validateRepaymentPeriod(loanDetails, 3, LocalDate.of(2023, 1, 31), 125.0, 0.0, 125.0, 0.0, 0.0, 0.0, 25.0, 25.0, 0.0, 0.0, 0.0,
+                    0.0, 0.0, 25.0);
+            validateRepaymentPeriod(loanDetails, 4, LocalDate.of(2023, 2, 15), 125.0, 0.0, 125.0, 0.0, 0.0, 0.0, 25.0, 25.0, 0.0, 0.0, 0.0,
+                    0.0, 0.0, 25.0);
+            assertTrue(loanDetails.getStatus().getActive());
+        } finally {
+            GlobalConfigurationHelper.updateIsBusinessDateEnabled(requestSpec, responseSpec, Boolean.FALSE);
+        }
+    }
+
+    // UC106: Advanced payment allocation, horizontal repayment processing, mixed grouping of allocation rules
+    // ADVANCED_PAYMENT_ALLOCATION_STRATEGY
+    // 1. Create a Loan product, but the allocation rules are mixed -> expect validation error
+    @Test
+    public void uc106() {
+        try {
+
+            GlobalConfigurationHelper.updateIsBusinessDateEnabled(requestSpec, responseSpec, Boolean.TRUE);
+            businessDateHelper.updateBusinessDate(new BusinessDateRequest().type(BusinessDateType.BUSINESS_DATE.getName())
+                    .date("2023.02.22").dateFormat("yyyy.MM.dd").locale("en"));
+
+            final Account assetAccount = accountHelper.createAssetAccount();
+            final Account incomeAccount = accountHelper.createIncomeAccount();
+            final Account expenseAccount = accountHelper.createExpenseAccount();
+            final Account overpaymentAccount = accountHelper.createLiabilityAccount();
+            AdvancedPaymentData defaultPaymentAllocation = createDefaultPaymentAllocationWithMixedGrouping();
+
+            ArrayList<HashMap<String, Object>> loanProductErrorData = createLoanProductGetError("500", "15", "4", false,
+                    LoanScheduleType.PROGRESSIVE, LoanScheduleProcessingType.HORIZONTAL, defaultPaymentAllocation, assetAccount,
+                    incomeAccount, expenseAccount, overpaymentAccount);
+            assertNotNull(loanProductErrorData);
+            assertEquals("mixed.due.type.allocation.rules.are.not.supported.with.horizontal.installment.processing",
+                    loanProductErrorData.get(0).get(CommonConstants.RESPONSE_ERROR_MESSAGE_CODE));
+        } finally {
+            GlobalConfigurationHelper.updateIsBusinessDateEnabled(requestSpec, responseSpec, Boolean.FALSE);
+        }
+    }
+
+    // UC107: Advanced payment allocation, vertical repayment processing, mixed grouping of allocation rules
+    // ADVANCED_PAYMENT_ALLOCATION_STRATEGY
+    // 1. Create a Loan product, but the allocation rules are mixed -> no validation error
+    // 2. Change transaction processor while submitting loan -> expect validation error
+    // 3. Change to HORIZONTAL loan schedule processing and allocation rules are mixed - > expect validation error
+    @Test
+    public void uc107() {
+        try {
+
+            GlobalConfigurationHelper.updateIsBusinessDateEnabled(requestSpec, responseSpec, Boolean.TRUE);
+            businessDateHelper.updateBusinessDate(new BusinessDateRequest().type(BusinessDateType.BUSINESS_DATE.getName())
+                    .date("2023.02.22").dateFormat("yyyy.MM.dd").locale("en"));
+
+            final Account assetAccount = accountHelper.createAssetAccount();
+            final Account incomeAccount = accountHelper.createIncomeAccount();
+            final Account expenseAccount = accountHelper.createExpenseAccount();
+            final Account overpaymentAccount = accountHelper.createLiabilityAccount();
+            AdvancedPaymentData defaultPaymentAllocation = createDefaultPaymentAllocationWithMixedGrouping();
+
+            Integer localLoanProductId = createLoanProduct("500", "15", "4", false, LoanScheduleType.PROGRESSIVE,
+                    LoanScheduleProcessingType.VERTICAL, defaultPaymentAllocation, assetAccount, incomeAccount, expenseAccount,
+                    overpaymentAccount);
+            assertNotNull(localLoanProductId);
+
+            CallFailedRuntimeException exception = assertThrows(CallFailedRuntimeException.class,
+                    () -> applyForLoanApplication(client.getClientId(), localLoanProductId, 500L, 45, 15, 3, 0, "01 January 2023",
+                            "01 January 2023", FineractStyleLoanRepaymentScheduleTransactionProcessor.STRATEGY_CODE,
+                            LoanScheduleType.PROGRESSIVE.name(), LoanScheduleProcessingType.VERTICAL.name()));
+            assertEquals(400, exception.getResponse().code());
+            assertTrue(exception.getMessage().contains("supported.only.with.advanced.payment.allocation.strategy"));
+
+            exception = assertThrows(CallFailedRuntimeException.class,
+                    () -> applyForLoanApplication(client.getClientId(), localLoanProductId, 500L, 45, 15, 3, 0, "01 January 2023",
+                            "01 January 2023", AdvancedPaymentScheduleTransactionProcessor.ADVANCED_PAYMENT_ALLOCATION_STRATEGY,
+                            LoanScheduleType.PROGRESSIVE.name(), LoanScheduleProcessingType.HORIZONTAL.name()));
+            assertEquals(400, exception.getResponse().code());
+            assertTrue(exception.getMessage()
+                    .contains("mixed.due.type.allocation.rules.are.not.supported.with.horizontal.installment.processing"));
+        } finally {
+            GlobalConfigurationHelper.updateIsBusinessDateEnabled(requestSpec, responseSpec, Boolean.FALSE);
+        }
+    }
+
     private static void validateLoanSummaryBalances(GetLoansLoanIdResponse loanDetails, Double totalOutstanding, Double totalRepayment,
             Double principalOutstanding, Double principalPaid, Double totalOverpaid) {
         assertEquals(totalOutstanding, loanDetails.getSummary().getTotalOutstanding());
@@ -1920,7 +2241,22 @@ public class AdvancedPaymentAllocationLoanRepaymentScheduleTest {
             paymentAllocationOrder.setPaymentAllocationRule(pat.name());
             paymentAllocationOrder.setOrder(integer.getAndIncrement());
             return paymentAllocationOrder;
-        }).toList();
+        }).collect(Collectors.toList());
+    }
+
+    private static AdvancedPaymentData createDefaultPaymentAllocationWithMixedGrouping() {
+        AdvancedPaymentData advancedPaymentData = new AdvancedPaymentData();
+        advancedPaymentData.setTransactionType("DEFAULT");
+        advancedPaymentData.setFutureInstallmentAllocationRule("NEXT_INSTALLMENT");
+
+        List<PaymentAllocationOrder> paymentAllocationOrders = getPaymentAllocationOrder(PaymentAllocationType.DUE_PENALTY,
+                PaymentAllocationType.PAST_DUE_FEE, PaymentAllocationType.PAST_DUE_PRINCIPAL, PaymentAllocationType.PAST_DUE_INTEREST,
+                PaymentAllocationType.PAST_DUE_PENALTY, PaymentAllocationType.DUE_FEE, PaymentAllocationType.DUE_PRINCIPAL,
+                PaymentAllocationType.DUE_INTEREST, PaymentAllocationType.IN_ADVANCE_PENALTY, PaymentAllocationType.IN_ADVANCE_FEE,
+                PaymentAllocationType.IN_ADVANCE_PRINCIPAL, PaymentAllocationType.IN_ADVANCE_INTEREST);
+
+        advancedPaymentData.setPaymentAllocationOrder(paymentAllocationOrders);
+        return advancedPaymentData;
     }
 
     private static AdvancedPaymentData createDefaultPaymentAllocation() {
@@ -1954,7 +2290,44 @@ public class AdvancedPaymentAllocationLoanRepaymentScheduleTest {
     }
 
     private static Integer createLoanProduct(final String principal, final String repaymentAfterEvery, final String numberOfRepayments,
-            boolean autoPayForDownPayment, final Account... accounts) {
+            boolean autoPayForDownPayment, LoanScheduleType loanScheduleType, LoanScheduleProcessingType loanScheduleProcessingType,
+            AdvancedPaymentData allocationRuleData, final Account... accounts) {
+        LOG.info("------------------------------CREATING NEW LOAN PRODUCT ---------------------------------------");
+        final String loanProductJSON = new LoanProductTestBuilder().withMinPrincipal(principal).withPrincipal(principal)
+                .withRepaymentTypeAsDays().withRepaymentAfterEvery(repaymentAfterEvery).withNumberOfRepayments(numberOfRepayments)
+                .withEnableDownPayment(true, "25", autoPayForDownPayment).withinterestRatePerPeriod("0")
+                .withInterestRateFrequencyTypeAsMonths()
+                .withRepaymentStrategy(AdvancedPaymentScheduleTransactionProcessor.ADVANCED_PAYMENT_ALLOCATION_STRATEGY)
+                .withAmortizationTypeAsEqualPrincipalPayment().withInterestTypeAsFlat().withAccountingRulePeriodicAccrual(accounts)
+                .addAdvancedPaymentAllocation(allocationRuleData).withInterestCalculationPeriodTypeAsRepaymentPeriod(true)
+                .withInterestTypeAsDecliningBalance().withMultiDisburse().withDisallowExpectedDisbursements(true)
+                .withLoanScheduleType(loanScheduleType).withLoanScheduleProcessingType(loanScheduleProcessingType).withDaysInMonth("30")
+                .withDaysInYear("365").withMoratorium("0", "0").build(null);
+        return loanTransactionHelper.getLoanProductId(loanProductJSON);
+    }
+
+    private static ArrayList<HashMap<String, Object>> createLoanProductGetError(final String principal, final String repaymentAfterEvery,
+            final String numberOfRepayments, boolean autoPayForDownPayment, LoanScheduleType loanScheduleType,
+            LoanScheduleProcessingType loanScheduleProcessingType, AdvancedPaymentData allocationRuleData, final Account... accounts) {
+        LOG.info("------------------------------CREATING NEW LOAN PRODUCT ---------------------------------------");
+        final String loanProductJSON = new LoanProductTestBuilder().withMinPrincipal(principal).withPrincipal(principal)
+                .withRepaymentTypeAsDays().withRepaymentAfterEvery(repaymentAfterEvery).withNumberOfRepayments(numberOfRepayments)
+                .withEnableDownPayment(true, "25", autoPayForDownPayment).withinterestRatePerPeriod("0")
+                .withInterestRateFrequencyTypeAsMonths()
+                .withRepaymentStrategy(AdvancedPaymentScheduleTransactionProcessor.ADVANCED_PAYMENT_ALLOCATION_STRATEGY)
+                .withAmortizationTypeAsEqualPrincipalPayment().withInterestTypeAsFlat().withAccountingRulePeriodicAccrual(accounts)
+                .addAdvancedPaymentAllocation(allocationRuleData).withInterestCalculationPeriodTypeAsRepaymentPeriod(true)
+                .withInterestTypeAsDecliningBalance().withMultiDisburse().withDisallowExpectedDisbursements(true)
+                .withLoanScheduleType(loanScheduleType).withLoanScheduleProcessingType(loanScheduleProcessingType).withDaysInMonth("30")
+                .withDaysInYear("365").withMoratorium("0", "0").build(null);
+        LoanTransactionHelper loanTransactionHelperBadRequest = new LoanTransactionHelper(requestSpec,
+                new ResponseSpecBuilder().expectStatusCode(400).build());
+        return loanTransactionHelperBadRequest.getLoanProductError(loanProductJSON, CommonConstants.RESPONSE_ERROR);
+    }
+
+    private static Integer createLoanProduct(final String principal, final String repaymentAfterEvery, final String numberOfRepayments,
+            boolean autoPayForDownPayment, LoanScheduleType loanScheduleType, LoanScheduleProcessingType loanScheduleProcessingType,
+            final Account... accounts) {
         AdvancedPaymentData defaultAllocation = createDefaultPaymentAllocation();
         AdvancedPaymentData goodwillCreditAllocation = createPaymentAllocation("GOODWILL_CREDIT", "LAST_INSTALLMENT");
         AdvancedPaymentData merchantIssuedRefundAllocation = createPaymentAllocation("MERCHANT_ISSUED_REFUND", "REAMORTIZATION");
@@ -1969,8 +2342,9 @@ public class AdvancedPaymentAllocationLoanRepaymentScheduleTest {
                 .addAdvancedPaymentAllocation(defaultAllocation, goodwillCreditAllocation, merchantIssuedRefundAllocation,
                         payoutRefundAllocation)
                 .withInterestCalculationPeriodTypeAsRepaymentPeriod(true).withInterestTypeAsDecliningBalance().withMultiDisburse()
-                .withDisallowExpectedDisbursements(true).withLoanScheduleType(LoanScheduleType.PROGRESSIVE).withDaysInMonth("30")
+                .withDisallowExpectedDisbursements(true).withLoanScheduleType(loanScheduleType)
-                .withDaysInYear("365").withMoratorium("0", "0").build(null);
+                .withLoanScheduleProcessingType(loanScheduleProcessingType).withDaysInMonth("30").withDaysInYear("365")
+                .withMoratorium("0", "0").build(null);
         return loanTransactionHelper.getLoanProductId(loanProductJSON);
     }
 
@@ -2022,16 +2396,27 @@ public class AdvancedPaymentAllocationLoanRepaymentScheduleTest {
 
     private static PostLoansResponse applyForLoanApplication(final Long clientId, final Integer loanProductId, final Long principal,
             final int loanTermFrequency, final int repaymentAfterEvery, final int numberOfRepayments, final int interestRate,
-            final String expectedDisbursementDate, final String submittedOnDate) {
+            final String expectedDisbursementDate, final String submittedOnDate, String transactionProcessorCode, String loanScheduleType,
+            String loanScheduleProcessingType) {
         LOG.info("--------------------------------APPLYING FOR LOAN APPLICATION--------------------------------");
         return loanTransactionHelper.applyLoan(new PostLoansRequest().clientId(clientId).productId(loanProductId.longValue())
                 .expectedDisbursementDate(expectedDisbursementDate).dateFormat(DATETIME_PATTERN)
-                .transactionProcessingStrategyCode(AdvancedPaymentScheduleTransactionProcessor.ADVANCED_PAYMENT_ALLOCATION_STRATEGY)
+                .transactionProcessingStrategyCode(transactionProcessorCode).locale("en").submittedOnDate(submittedOnDate)
-                .locale("en").submittedOnDate(submittedOnDate).amortizationType(1).interestRatePerPeriod(interestRate)
+                .amortizationType(1).interestRatePerPeriod(interestRate).interestCalculationPeriodType(1).interestType(0)
-                .interestCalculationPeriodType(1).interestType(0).repaymentFrequencyType(0).repaymentEvery(repaymentAfterEvery)
+                .repaymentFrequencyType(0).repaymentEvery(repaymentAfterEvery).repaymentFrequencyType(0)
-                .repaymentFrequencyType(0).numberOfRepayments(numberOfRepayments).loanTermFrequency(loanTermFrequency)
+                .numberOfRepayments(numberOfRepayments).loanTermFrequency(loanTermFrequency).loanTermFrequencyType(0)
-                .loanTermFrequencyType(0).principal(BigDecimal.valueOf(principal)).loanType("individual")
+                .principal(BigDecimal.valueOf(principal)).loanType("individual").loanScheduleProcessingType(loanScheduleProcessingType)
-                .maxOutstandingLoanBalance(BigDecimal.valueOf(35000)));
+                .loanScheduleType(loanScheduleType).maxOutstandingLoanBalance(BigDecimal.valueOf(35000)));
+    }
+
+    private static PostLoansResponse applyForLoanApplication(final Long clientId, final Integer loanProductId, final Long principal,
+            final int loanTermFrequency, final int repaymentAfterEvery, final int numberOfRepayments, final int interestRate,
+            final String expectedDisbursementDate, final String submittedOnDate) {
+        LOG.info("--------------------------------APPLYING FOR LOAN APPLICATION--------------------------------");
+        return applyForLoanApplication(clientId, loanProductId, principal, loanTermFrequency, repaymentAfterEvery, numberOfRepayments,
+                interestRate, expectedDisbursementDate, submittedOnDate,
+                AdvancedPaymentScheduleTransactionProcessor.ADVANCED_PAYMENT_ALLOCATION_STRATEGY, LoanScheduleType.PROGRESSIVE.name(),
+                LoanScheduleProcessingType.HORIZONTAL.name());
     }
 
     private static void validateLoanTransaction(GetLoansLoanIdResponse loanDetails, int index, double transactionAmount,

integration-tests/src/test/java/org/apache/fineract/integrationtests/RefundForActiveLoansWithAdvancedPaymentAllocationTest.java

@@ -54,6 +54,8 @@ import org.apache.fineract.integrationtests.common.loans.LoanProductTestBuilder;
 import org.apache.fineract.integrationtests.common.loans.LoanTestLifecycleExtension;
 import org.apache.fineract.integrationtests.common.loans.LoanTransactionHelper;
 import org.apache.fineract.portfolio.loanaccount.domain.transactionprocessor.impl.AdvancedPaymentScheduleTransactionProcessor;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleProcessingType;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleType;
 import org.apache.fineract.portfolio.loanproduct.domain.PaymentAllocationType;
 import org.junit.jupiter.api.BeforeAll;
 import org.junit.jupiter.api.Test;
@@ -294,6 +296,7 @@ public class RefundForActiveLoansWithAdvancedPaymentAllocationTest {
                 .withRepaymentTypeAsDays().withRepaymentAfterEvery(repaymentAfterEvery).withNumberOfRepayments(numberOfRepayments)
                 .withEnableDownPayment(true, "25", true).withinterestRatePerPeriod("0").withInterestRateFrequencyTypeAsMonths()
                 .withRepaymentStrategy(AdvancedPaymentScheduleTransactionProcessor.ADVANCED_PAYMENT_ALLOCATION_STRATEGY)
+                .withLoanScheduleType(LoanScheduleType.PROGRESSIVE).withLoanScheduleProcessingType(LoanScheduleProcessingType.VERTICAL)
                 .withAmortizationTypeAsEqualPrincipalPayment().withInterestTypeAsFlat().withAccountingRulePeriodicAccrual(accounts)
                 .addAdvancedPaymentAllocation(defaultAllocation).withDaysInMonth("30").withDaysInYear("365").withMoratorium("0", "0")
                 .build(null);

integration-tests/src/test/java/org/apache/fineract/integrationtests/common/loans/LoanProductTestBuilder.java

@@ -28,6 +28,7 @@ import java.util.Map;
 import org.apache.fineract.client.models.AdvancedPaymentData;
 import org.apache.fineract.integrationtests.common.Utils;
 import org.apache.fineract.integrationtests.common.accounting.Account;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleProcessingType;
 import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleType;
 
 public class LoanProductTestBuilder {
@@ -152,7 +153,8 @@ public class LoanProductTestBuilder {
     private boolean enableAutoRepaymentForDownPayment = false;
     private Integer repaymentStartDateType = null;
     private boolean disableScheduleExtensionForDownPayment = false;
-    private LoanScheduleType loanScheduleType = LoanScheduleType.CUMULATIVE;
+    private String loanScheduleType = LoanScheduleType.CUMULATIVE.name();
+    private String loanScheduleProcessingType = LoanScheduleProcessingType.HORIZONTAL.name();
 
     public String build() {
         final HashMap<String, Object> map = build(null, null);
@@ -310,6 +312,7 @@ public class LoanProductTestBuilder {
             map.put("disableScheduleExtensionForDownPayment", disableScheduleExtensionForDownPayment);
         }
         map.put("loanScheduleType", loanScheduleType);
+        map.put("loanScheduleProcessingType", loanScheduleProcessingType);
 
         return map;
     }
@@ -751,7 +754,12 @@ public class LoanProductTestBuilder {
     }
 
     public LoanProductTestBuilder withLoanScheduleType(LoanScheduleType loanScheduleType) {
-        this.loanScheduleType = loanScheduleType;
+        this.loanScheduleType = loanScheduleType.name();
+        return this;
+    }
+
+    public LoanProductTestBuilder withLoanScheduleProcessingType(LoanScheduleProcessingType loanScheduleProcessingType) {
+        this.loanScheduleProcessingType = loanScheduleProcessingType.name();
         return this;
     }
 }