diff --git a/fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/DefaultLoanLifecycleStateMachine.java b/fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/DefaultLoanLifecycleStateMachine.java
index 097d6378c..5b44f78ed 100644
--- a/fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/DefaultLoanLifecycleStateMachine.java
+++ b/fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/DefaultLoanLifecycleStateMachine.java
@@ -202,6 +202,18 @@ public class DefaultLoanLifecycleStateMachine implements LoanLifecycleStateMachi
                     newState = activeTransition();
                 }
             break;
+            case LOAN_COMPLETE_TRANSFER:
+                if (anyOfAllowedWhenComingFrom(from, LoanStatus.TRANSFER_IN_PROGRESS)) {
+                    boolean isOverpaid = loan.getTotalOverpaid() != null && loan.getTotalOverpaid().compareTo(BigDecimal.ZERO) > 0;
+                    if (isOverpaid) {
+                        newState = overpaidTransition();
+                    } else if (loan.getSummary().isRepaidInFull(loan.getCurrency())) {
+                        newState = closeObligationsMetTransition();
+                    } else {
+                        newState = activeTransition();
+                    }
+                }
+            break;
             case WRITE_OFF_OUTSTANDING_UNDO:
                 if (anyOfAllowedWhenComingFrom(from, LoanStatus.CLOSED_WRITTEN_OFF)) {
                     newState = activeTransition();
diff --git a/fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/LoanEvent.java b/fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/LoanEvent.java
index a55a58d90..ca570eb66 100755
--- a/fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/LoanEvent.java
+++ b/fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/LoanEvent.java
@@ -48,6 +48,7 @@ public enum LoanEvent {
     LOAN_INITIATE_TRANSFER, //
     LOAN_REJECT_TRANSFER, //
     LOAN_WITHDRAW_TRANSFER, //
+    LOAN_COMPLETE_TRANSFER, //
     LOAN_CREDIT_BALANCE_REFUND, //
     LOAN_CHARGEBACK, //
     LOAN_CHARGE_ADDED, //
diff --git a/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/service/LoanWritePlatformServiceJpaRepositoryImpl.java b/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/service/LoanWritePlatformServiceJpaRepositoryImpl.java
index 49bc7e2a0..cc5956234 100644
--- a/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/service/LoanWritePlatformServiceJpaRepositoryImpl.java
+++ b/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/service/LoanWritePlatformServiceJpaRepositoryImpl.java
@@ -1731,11 +1731,7 @@ public class LoanWritePlatformServiceJpaRepositoryImpl implements LoanWritePlatf
         final LoanTransaction newTransferAcceptanceTransaction = LoanTransaction.approveTransfer(acceptedInOffice, loan, transferDate,
                 externalId);
         loan.addLoanTransaction(newTransferAcceptanceTransaction);
-        if (loan.getTotalOverpaid() != null) {
-            loanLifecycleStateMachine.transition(LoanEvent.LOAN_OVERPAYMENT, loan);
-        } else {
-            loanLifecycleStateMachine.transition(LoanEvent.LOAN_REPAYMENT_OR_WAIVER, loan);
-        }
+        loanLifecycleStateMachine.transition(LoanEvent.LOAN_COMPLETE_TRANSFER, loan);
         if (loanOfficer != null) {
             loanOfficerService.reassignLoanOfficer(loan, loanOfficer, transferDate);
         }
diff --git a/fineract-provider/src/test/java/org/apache/fineract/portfolio/loanaccount/domain/DefaultLoanLifecycleStateMachineTest.java b/fineract-provider/src/test/java/org/apache/fineract/portfolio/loanaccount/domain/DefaultLoanLifecycleStateMachineTest.java
index ac92c81a8..15f01d235 100644
--- a/fineract-provider/src/test/java/org/apache/fineract/portfolio/loanaccount/domain/DefaultLoanLifecycleStateMachineTest.java
+++ b/fineract-provider/src/test/java/org/apache/fineract/portfolio/loanaccount/domain/DefaultLoanLifecycleStateMachineTest.java
@@ -421,6 +421,55 @@ class DefaultLoanLifecycleStateMachineTest {
         verify(businessEventNotifierService).notifyPostBusinessEvent(any(LoanStatusChangedBusinessEvent.class));
     }
 
+    @Test
+    public void testTransitionShouldWorkProperlyForLoanCompleteTransferWhenTransferInProgress() {
+        // given
+        MonetaryCurrency currency = new MonetaryCurrency("USD", 2, null);
+        Loan loan = Mockito.mock(Loan.class);
+        LoanSummary loanSummary = Mockito.mock(LoanSummary.class);
+        Mockito.when(loan.getStatus()).thenReturn(LoanStatus.TRANSFER_IN_PROGRESS);
+        Mockito.when(loan.getTotalOverpaid()).thenReturn(null);
+        Mockito.when(loan.getSummary()).thenReturn(loanSummary);
+        Mockito.when(loan.getCurrency()).thenReturn(currency);
+        Mockito.when(loanSummary.isRepaidInFull(currency)).thenReturn(false);
+        // when
+        underTest.transition(LoanEvent.LOAN_COMPLETE_TRANSFER, loan);
+        // then
+        verify(loan).setLoanStatus(LoanStatus.ACTIVE);
+        verify(businessEventNotifierService).notifyPostBusinessEvent(any(LoanStatusChangedBusinessEvent.class));
+    }
+
+    @Test
+    public void testTransitionShouldWorkProperlyForLoanCompleteTransferWhenTransferInProgressAndOverpaid() {
+        // given
+        Loan loan = Mockito.mock(Loan.class);
+        Mockito.when(loan.getStatus()).thenReturn(LoanStatus.TRANSFER_IN_PROGRESS);
+        Mockito.when(loan.getTotalOverpaid()).thenReturn(BigDecimal.ONE);
+        // when
+        underTest.transition(LoanEvent.LOAN_COMPLETE_TRANSFER, loan);
+        // then
+        verify(loan).setLoanStatus(LoanStatus.OVERPAID);
+        verify(businessEventNotifierService).notifyPostBusinessEvent(any(LoanStatusChangedBusinessEvent.class));
+    }
+
+    @Test
+    public void testTransitionShouldWorkProperlyForLoanCompleteTransferWhenTransferInProgressAndFullyPaid() {
+        // given
+        MonetaryCurrency currency = new MonetaryCurrency("USD", 2, null);
+        Loan loan = Mockito.mock(Loan.class);
+        LoanSummary loanSummary = Mockito.mock(LoanSummary.class);
+        Mockito.when(loan.getStatus()).thenReturn(LoanStatus.TRANSFER_IN_PROGRESS);
+        Mockito.when(loan.getTotalOverpaid()).thenReturn(null);
+        Mockito.when(loan.getSummary()).thenReturn(loanSummary);
+        Mockito.when(loan.getCurrency()).thenReturn(currency);
+        Mockito.when(loanSummary.isRepaidInFull(currency)).thenReturn(true);
+        // when
+        underTest.transition(LoanEvent.LOAN_COMPLETE_TRANSFER, loan);
+        // then
+        verify(loan).setLoanStatus(LoanStatus.CLOSED_OBLIGATIONS_MET);
+        verify(businessEventNotifierService).notifyPostBusinessEvent(any(LoanStatusChangedBusinessEvent.class));
+    }
+
     private Loan createLoanWithStatus(LoanStatus status) {
         Loan result = new Loan();
         result.setLoanStatus(status);