FINERACT-2107: Interest refund configuration

fineract-investor/src/main/resources/jpa/investor/persistence.xml

@@ -118,6 +118,7 @@
         <class>org.apache.fineract.portfolio.loanaccount.domain.LoanCreditAllocationRule</class>
         <class>org.apache.fineract.portfolio.loanproduct.domain.CreditAllocationTransactionType</class>
         <class>org.apache.fineract.portfolio.loanproduct.domain.PaymentAllocationTypeListConverter</class>
+        <class>org.apache.fineract.portfolio.loanproduct.domain.SupportedInterestRefundTypesListConverter</class>
         <class>org.apache.fineract.portfolio.loanaccount.domain.reaging.LoanReAgeParameter</class>
         <class>org.apache.fineract.portfolio.loanaccount.rescheduleloan.domain.LoanRescheduleRequest</class>
         <class>org.apache.fineract.portfolio.repaymentwithpostdatedchecks.domain.PostDatedChecks</class>

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

@@ -4457,8 +4457,7 @@ public class Loan extends AbstractAuditableWithUTCDateTimeCustom<Long> {
                 calendarHistoryDataWrapper, scheduleGeneratorDTO.getNumberOfdays(), scheduleGeneratorDTO.isSkipRepaymentOnFirstDayofMonth(),
                 holidayDetailDTO, allowCompoundingOnEod, scheduleGeneratorDTO.isFirstRepaymentDateAllowedOnHoliday(),
                 scheduleGeneratorDTO.isInterestToBeRecoveredFirstWhenGreaterThanEMI(), this.fixedPrincipalPercentagePerInstallment,
-                scheduleGeneratorDTO.isPrincipalCompoundingDisabledForOverdueLoans(), repaymentStartDateType, getSubmittedOnDate(),
-                loanProduct.getLoanProductRelatedDetail().isEnableAccrualActivityPosting());
+                scheduleGeneratorDTO.isPrincipalCompoundingDisabledForOverdueLoans(), repaymentStartDateType, getSubmittedOnDate());
     }
 
     public BigDecimal constructLoanTermVariations(FloatingRateDTO floatingRateDTO, BigDecimal annualNominalInterestRate,
@@ -4706,8 +4705,7 @@ public class Loan extends AbstractAuditableWithUTCDateTimeCustom<Long> {
                 compoundingCalendarInstance, compoundingFrequencyType, this.loanProduct.preCloseInterestCalculationStrategy(),
                 rescheduleStrategyMethod, loanCalendar, getApprovedPrincipal(), annualNominalInterestRate, loanTermVariations,
                 calendarHistoryDataWrapper, numberofdays, isSkipRepaymentonmonthFirst, holidayDetailDTO, allowCompoundingOnEod, false,
-                false, this.fixedPrincipalPercentagePerInstallment, false, repaymentStartDateType, getSubmittedOnDate(),
-                loanProduct.getLoanProductRelatedDetail().isEnableAccrualActivityPosting());
+                false, this.fixedPrincipalPercentagePerInstallment, false, repaymentStartDateType, getSubmittedOnDate());
     }
 
     public void updateRescheduledByUser(AppUser rescheduledByUser) {

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

@@ -65,6 +65,7 @@ public enum LoanTransactionType {
     REAMORTIZE(30, "loanTransactionType.reAmortize"), //
     INTEREST_PAYMENT_WAIVER(31, "loanTransactionType.interestPaymentWaiver"), //
     ACCRUAL_ACTIVITY(32, "loanTransactionType.accrualActivity"), //
+    INTEREST_REFUND(33, "loanTransactionType.interestRefund"), //
     ;
 
     private final Integer value;
@@ -113,6 +114,7 @@ public enum LoanTransactionType {
             case 30 -> LoanTransactionType.REAMORTIZE;
             case 31 -> LoanTransactionType.INTEREST_PAYMENT_WAIVER;
             case 32 -> LoanTransactionType.ACCRUAL_ACTIVITY;
+            case 33 -> LoanTransactionType.INTEREST_REFUND;
             default -> LoanTransactionType.INVALID;
         };
     }
@@ -221,4 +223,9 @@ public enum LoanTransactionType {
     public boolean isAccrualActivity() {
         return this.equals(LoanTransactionType.ACCRUAL_ACTIVITY);
     }
+
+    public boolean isInterestRefund() {
+        return this.equals(LoanTransactionType.INTEREST_REFUND);
+    }
+
 }

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

@@ -53,6 +53,7 @@ import org.apache.fineract.portfolio.loanproduct.domain.InterestRecalculationCom
 import org.apache.fineract.portfolio.loanproduct.domain.LoanPreClosureInterestCalculationStrategy;
 import org.apache.fineract.portfolio.loanproduct.domain.LoanProductRelatedDetail;
 import org.apache.fineract.portfolio.loanproduct.domain.LoanRescheduleStrategyMethod;
+import org.apache.fineract.portfolio.loanproduct.domain.LoanSupportedInterestRefundTypes;
 import org.apache.fineract.portfolio.loanproduct.domain.RecalculationFrequencyType;
 import org.apache.fineract.portfolio.loanproduct.domain.RepaymentStartDateType;
 
@@ -225,6 +226,7 @@ public final class LoanApplicationTerms {
     private final LoanScheduleType loanScheduleType;
     private final LoanScheduleProcessingType loanScheduleProcessingType;
     private final boolean enableAccrualActivityPosting;
+    private final List<LoanSupportedInterestRefundTypes> supportedInterestRefundTypes;
 
     public static LoanApplicationTerms assembleFrom(final ApplicationCurrency currency, final Integer loanTermFrequency,
             final PeriodFrequencyType loanTermPeriodFrequencyType, final Integer numberOfRepayments, final Integer repaymentEvery,
@@ -253,7 +255,7 @@ public final class LoanApplicationTerms {
             final Boolean isAutoRepaymentForDownPaymentEnabled, final RepaymentStartDateType repaymentStartDateType,
             final LocalDate submittedOnDate, final LoanScheduleType loanScheduleType,
             final LoanScheduleProcessingType loanScheduleProcessingType, final Integer fixedLength,
-            final boolean enableAccrualActivityPosting) {
+            final boolean enableAccrualActivityPosting, final List<LoanSupportedInterestRefundTypes> supportedInterestRefundTypes) {
 
         final LoanRescheduleStrategyMethod rescheduleStrategyMethod = null;
         final CalendarHistoryDataWrapper calendarHistoryDataWrapper = null;
@@ -272,7 +274,7 @@ public final class LoanApplicationTerms {
                 isInterestToBeRecoveredFirstWhenGreaterThanEMI, fixedPrincipalPercentagePerInstallment,
                 isPrincipalCompoundingDisabledForOverdueLoans, enableDownPayment, disbursedAmountPercentageForDownPayment,
                 isAutoRepaymentForDownPaymentEnabled, repaymentStartDateType, submittedOnDate, loanScheduleType, loanScheduleProcessingType,
-                fixedLength, enableAccrualActivityPosting);
+                fixedLength, enableAccrualActivityPosting, supportedInterestRefundTypes);
 
     }
 
@@ -293,8 +295,7 @@ public final class LoanApplicationTerms {
             final boolean isSkipRepaymentOnFirstDayOfMonth, final HolidayDetailDTO holidayDetailDTO, final boolean allowCompoundingOnEod,
             final boolean isFirstRepaymentDateAllowedOnHoliday, final boolean isInterestToBeRecoveredFirstWhenGreaterThanEMI,
             final BigDecimal fixedPrincipalPercentagePerInstallment, final boolean isPrincipalCompoundingDisabledForOverdueLoans,
-            final RepaymentStartDateType repaymentStartDateType, final LocalDate submittedOnDate,
-            final boolean enableAccrualActivityPosting) {
+            final RepaymentStartDateType repaymentStartDateType, final LocalDate submittedOnDate) {
 
         final Integer numberOfRepayments = loanProductRelatedDetail.getNumberOfRepayments();
         final Integer repaymentEvery = loanProductRelatedDetail.getRepayEvery();
@@ -346,7 +347,8 @@ public final class LoanApplicationTerms {
                 isInterestToBeRecoveredFirstWhenGreaterThanEMI, fixedPrincipalPercentagePerInstallment,
                 isPrincipalCompoundingDisabledForOverdueLoans, isDownPaymentEnabled, disbursedAmountPercentageForDownPayment,
                 isAutoRepaymentForDownPaymentEnabled, repaymentStartDateType, submittedOnDate, loanScheduleType, loanScheduleProcessingType,
-                fixedLength, enableAccrualActivityPosting);
+                fixedLength, loanProductRelatedDetail.isEnableAccrualActivityPosting(),
+                loanProductRelatedDetail.getSupportedInterestRefundTypes());
     }
 
     private LoanApplicationTerms(final ApplicationCurrency currency, final Integer loanTermFrequency,
@@ -375,7 +377,8 @@ public final class LoanApplicationTerms {
             final boolean isPrincipalCompoundingDisabledForOverdueLoans, final boolean isDownPaymentEnabled,
             final BigDecimal disbursedAmountPercentageForDownPayment, final boolean isAutoRepaymentForDownPaymentEnabled,
             final RepaymentStartDateType repaymentStartDateType, final LocalDate submittedOnDate, final LoanScheduleType loanScheduleType,
-            final LoanScheduleProcessingType loanScheduleProcessingType, final Integer fixedLength, boolean enableAccrualActivityPosting) {
+            final LoanScheduleProcessingType loanScheduleProcessingType, final Integer fixedLength, boolean enableAccrualActivityPosting,
+            final List<LoanSupportedInterestRefundTypes> supportedInterestRefundTypes) {
 
         this.currency = currency;
         this.loanTermFrequency = loanTermFrequency;
@@ -473,6 +476,7 @@ public final class LoanApplicationTerms {
         this.loanScheduleType = loanScheduleType;
         this.loanScheduleProcessingType = loanScheduleProcessingType;
         this.fixedLength = fixedLength;
+        this.supportedInterestRefundTypes = supportedInterestRefundTypes;
     }
 
     public Money adjustPrincipalIfLastRepaymentPeriod(final Money principalForPeriod, final Money totalCumulativePrincipalToDate,
@@ -1337,7 +1341,7 @@ public final class LoanApplicationTerms {
                 this.graceOnArrearsAgeing, this.daysInMonthType.getValue(), this.daysInYearType.getValue(),
                 this.interestRecalculationEnabled, this.isEqualAmortization, this.isDownPaymentEnabled,
                 this.disbursedAmountPercentageForDownPayment, this.isAutoRepaymentForDownPaymentEnabled, this.loanScheduleType,
-                this.loanScheduleProcessingType, this.fixedLength, this.enableAccrualActivityPosting);
+                this.loanScheduleProcessingType, this.fixedLength, this.enableAccrualActivityPosting, this.supportedInterestRefundTypes);
     }
 
     public Integer getLoanTermFrequency() {

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

@@ -165,5 +165,6 @@ public interface LoanProductConstants {
     String FIXED_LENGTH = "fixedLength";
 
     String ENABLE_ACCRUAL_ACTIVITY_POSTING = "enableAccrualActivityPosting";
+    String SUPPORTED_INTEREST_REFUND_TYPES = "supportedInterestRefundTypes";
 
 }

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

@@ -25,6 +25,7 @@ import java.util.List;
 import java.util.Set;
 import org.apache.fineract.accounting.producttoaccountmapping.data.ChargeToGLAccountMapper;
 import org.apache.fineract.infrastructure.core.data.EnumOptionData;
+import org.apache.fineract.infrastructure.core.data.StringEnumOptionData;
 import org.apache.fineract.portfolio.delinquency.api.DelinquencyApiResourceSwagger.GetDelinquencyBucketsResponse;
 
 /**
@@ -318,6 +319,7 @@ final class LoanProductsApiResourceSwagger {
             public boolean active;
         }
 
+        public List<String> supportedInterestRefundTypes;
     }
 
     @Schema(description = "PostLoanProductsResponse")
@@ -600,6 +602,7 @@ final class LoanProductsApiResourceSwagger {
         @Schema(example = "0")
         public Integer principalThresholdForLastInstalment;
         public GetLoanProductsResponse.GetLoanProductsRepaymentStartDateType repaymentStartDateType;
+        public List<StringEnumOptionData> supportedInterestRefundTypes;
     }
 
     @Schema(description = "GetLoanProductsTemplateResponse")
@@ -1063,6 +1066,8 @@ final class LoanProductsApiResourceSwagger {
         public List<EnumOptionData> creditAllocationAllocationTypes;
         public List<EnumOptionData> creditAllocationTransactionTypes;
 
+        public List<StringEnumOptionData> supportedInterestRefundTypes;
+        public List<StringEnumOptionData> supportedInterestRefundTypesOptions;
     }
 
     @Schema(description = "GetLoanProductsProductIdResponse")
@@ -1336,6 +1341,7 @@ final class LoanProductsApiResourceSwagger {
         public EnumOptionData loanScheduleProcessingType;
         @Schema(example = "false")
         public Boolean enableAccrualActivityPosting;
+        public List<StringEnumOptionData> supportedInterestRefundTypes;
     }
 
     @Schema(description = "PutLoanProductsProductIdRequest")
@@ -1627,6 +1633,7 @@ final class LoanProductsApiResourceSwagger {
             public boolean active;
         }
 
+        public List<String> supportedInterestRefundTypes;
     }
 
     public static final class AdvancedPaymentData {

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

@@ -33,6 +33,7 @@ import org.apache.fineract.accounting.glaccount.data.GLAccountData;
 import org.apache.fineract.accounting.producttoaccountmapping.data.ChargeToGLAccountMapper;
 import org.apache.fineract.accounting.producttoaccountmapping.data.PaymentTypeToGLAccountMapper;
 import org.apache.fineract.infrastructure.core.data.EnumOptionData;
+import org.apache.fineract.infrastructure.core.data.StringEnumOptionData;
 import org.apache.fineract.organisation.monetary.data.CurrencyData;
 import org.apache.fineract.portfolio.calendar.data.CalendarData;
 import org.apache.fineract.portfolio.charge.data.ChargeData;
@@ -134,6 +135,7 @@ public class LoanProductData implements Serializable {
     private final boolean canDefineInstallmentAmount;
     private final Integer installmentAmountInMultiplesOf;
     private final EnumOptionData repaymentStartDateType;
+    private final List<StringEnumOptionData> supportedInterestRefundTypes;
 
     // charges
     private final Collection<ChargeData> charges;
@@ -190,6 +192,7 @@ public class LoanProductData implements Serializable {
     private final List<EnumOptionData> interestRecalculationFrequencyTypeOptions;
     private final List<FloatingRateData> floatingRateOptions;
     private final List<EnumOptionData> repaymentStartDateTypeOptions;
+    private final List<StringEnumOptionData> supportedInterestRefundTypesOptions;
 
     private final Boolean multiDisburseLoan;
     private final Integer maxTrancheCount;
@@ -325,6 +328,7 @@ public class LoanProductData implements Serializable {
         final EnumOptionData loanScheduleTypeOptions = null;
         final EnumOptionData loanScheduleProcessingTypeOptions = null;
         final boolean enableAccrualActivityPosting = false;
+        final List<StringEnumOptionData> supportedInterestRefundTypes = null;
 
         return new LoanProductData(id, name, shortName, description, currency, principal, minPrincipal, maxPrincipal, tolerance,
                 numberOfRepayments, minNumberOfRepayments, maxNumberOfRepayments, repaymentEvery, interestRatePerPeriod,
@@ -345,7 +349,7 @@ public class LoanProductData implements Serializable {
                 fixedPrincipalPercentagePerInstallment, delinquencyBucketOptions, delinquencyBucket, dueDaysForRepaymentEvent,
                 overDueDaysForRepaymentEvent, enableDownPayment, disbursedAmountPercentageDownPayment, enableAutoRepaymentForDownPayment,
                 paymentAllocation, creditAllocation, repaymentStartDateType, enableInstallmentLevelDelinquency, loanScheduleType,
-                loanScheduleProcessingType, fixedLength, enableAccrualActivityPosting);
+                loanScheduleProcessingType, fixedLength, enableAccrualActivityPosting, supportedInterestRefundTypes);
 
     }
 
@@ -446,6 +450,7 @@ public class LoanProductData implements Serializable {
         final EnumOptionData loanScheduleType = null;
         final EnumOptionData loanScheduleProcessingType = null;
         final boolean enableAccrualActivityPosting = false;
+        final List<StringEnumOptionData> supportedInterestRefundTypes = null;
 
         return new LoanProductData(id, name, shortName, description, currency, principal, minPrincipal, maxPrincipal, tolerance,
                 numberOfRepayments, minNumberOfRepayments, maxNumberOfRepayments, repaymentEvery, interestRatePerPeriod,
@@ -466,7 +471,7 @@ public class LoanProductData implements Serializable {
                 fixedPrincipalPercentagePerInstallment, delinquencyBucketOptions, delinquencyBucket, dueDaysForRepaymentEvent,
                 overDueDaysForRepaymentEvent, enableDownPayment, disbursedAmountPercentageDownPayment, enableAutoRepaymentForDownPayment,
                 paymentAllocation, creditAllocation, repaymentStartDateType, enableInstallmentLevelDelinquency, loanScheduleType,
-                loanScheduleProcessingType, fixedLength, enableAccrualActivityPosting);
+                loanScheduleProcessingType, fixedLength, enableAccrualActivityPosting, supportedInterestRefundTypes);
 
     }
 
@@ -574,6 +579,7 @@ public class LoanProductData implements Serializable {
         final EnumOptionData loanScheduleType = LoanScheduleType.CUMULATIVE.asEnumOptionData();
         final EnumOptionData loanScheduleProcessingType = LoanScheduleProcessingType.HORIZONTAL.asEnumOptionData();
         final boolean enableAccrualActivityPosting = false;
+        final List<StringEnumOptionData> supportedInterestRefundTypes = null;
 
         return new LoanProductData(id, name, shortName, description, currency, principal, minPrincipal, maxPrincipal, tolerance,
                 numberOfRepayments, minNumberOfRepayments, maxNumberOfRepayments, repaymentEvery, interestRatePerPeriod,
@@ -594,7 +600,7 @@ public class LoanProductData implements Serializable {
                 fixedPrincipalPercentagePerInstallment, delinquencyBucketOptions, delinquencyBucket, dueDaysForRepaymentEvent,
                 overDueDaysForRepaymentEvent, enableDownPayment, disbursedAmountPercentageDownPayment, enableAutoRepaymentForDownPayment,
                 paymentAllocation, creditAllocation, repaymentStartDateType, enableInstallmentLevelDelinquency, loanScheduleType,
-                loanScheduleProcessingType, fixedLength, enableAccrualActivityPosting);
+                loanScheduleProcessingType, fixedLength, enableAccrualActivityPosting, supportedInterestRefundTypes);
 
     }
 
@@ -696,6 +702,7 @@ public class LoanProductData implements Serializable {
         final EnumOptionData loanScheduleType = null;
         final EnumOptionData loanScheduleProcessingType = null;
         final boolean enableAccrualActivityPosting = false;
+        final List<StringEnumOptionData> supportedInterestRefundTypes = null;
 
         return new LoanProductData(id, name, shortName, description, currency, principal, minPrincipal, maxPrincipal, tolerance,
                 numberOfRepayments, minNumberOfRepayments, maxNumberOfRepayments, repaymentEvery, interestRatePerPeriod,
@@ -716,7 +723,7 @@ public class LoanProductData implements Serializable {
                 fixedPrincipalPercentagePerInstallment, delinquencyBucketOptions, delinquencyBucket, dueDaysForRepaymentEvent,
                 overDueDaysForRepaymentEvent, enableDownPayment, disbursedAmountPercentageDownPayment, enableAutoRepaymentForDownPayment,
                 paymentAllocation, creditAllocationData, repaymentStartDateType, enableInstallmentLevelDelinquency, loanScheduleType,
-                loanScheduleProcessingType, fixedLength, enableAccrualActivityPosting);
+                loanScheduleProcessingType, fixedLength, enableAccrualActivityPosting, supportedInterestRefundTypes);
     }
 
     public static LoanProductData withAccountingDetails(final LoanProductData productData, final Map<String, Object> accountingMappings,
@@ -767,7 +774,7 @@ public class LoanProductData implements Serializable {
             final Collection<AdvancedPaymentData> paymentAllocation, final Collection<CreditAllocationData> creditAllocation,
             final EnumOptionData repaymentStartDateType, final boolean enableInstallmentLevelDelinquency,
             final EnumOptionData loanScheduleType, final EnumOptionData loanScheduleProcessingType, final Integer fixedLength,
-            final boolean enableAccrualActivityPosting) {
+            final boolean enableAccrualActivityPosting, final List<StringEnumOptionData> supportedInterestRefundTypes) {
         this.id = id;
         this.name = name;
         this.shortName = shortName;
@@ -904,6 +911,8 @@ public class LoanProductData implements Serializable {
         this.loanScheduleTypeOptions = null;
         this.loanScheduleProcessingTypeOptions = null;
         this.enableAccrualActivityPosting = enableAccrualActivityPosting;
+        this.supportedInterestRefundTypes = supportedInterestRefundTypes;
+        this.supportedInterestRefundTypesOptions = null;
     }
 
     public LoanProductData(final LoanProductData productData, final Collection<ChargeData> chargeOptions,
@@ -925,7 +934,8 @@ public class LoanProductData implements Serializable {
             final List<EnumOptionData> advancedPaymentAllocationFutureInstallmentAllocationRules,
             final List<EnumOptionData> advancedPaymentAllocationTypes, final List<EnumOptionData> loanScheduleTypeOptions,
             final List<EnumOptionData> loanScheduleProcessingTypeOptions, final List<EnumOptionData> creditAllocationTransactionTypes,
-            final List<EnumOptionData> creditAllocationAllocationTypes) {
+            final List<EnumOptionData> creditAllocationAllocationTypes,
+            final List<StringEnumOptionData> supportedInterestRefundTypesOptions) {
 
         this.id = productData.id;
         this.name = productData.name;
@@ -1080,6 +1090,8 @@ public class LoanProductData implements Serializable {
         this.loanScheduleProcessingTypeOptions = loanScheduleProcessingTypeOptions;
         this.loanScheduleTypeOptions = loanScheduleTypeOptions;
         this.enableAccrualActivityPosting = productData.enableAccrualActivityPosting;
+        this.supportedInterestRefundTypesOptions = supportedInterestRefundTypesOptions;
+        this.supportedInterestRefundTypes = productData.supportedInterestRefundTypes;
     }
 
     private Collection<ChargeData> nullIfEmpty(final Collection<ChargeData> charges) {

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

@@ -442,6 +442,15 @@ public class LoanProduct extends AbstractPersistableCustom<Long> {
         final boolean enableAccrualActivityPosting = command
                 .booleanPrimitiveValueOfParameterNamed(LoanProductConstants.ENABLE_ACCRUAL_ACTIVITY_POSTING);
 
+        List<LoanSupportedInterestRefundTypes> supportedInterestRefundTypes = new ArrayList<>();
+        if (command.parameterExists(LoanProductConstants.SUPPORTED_INTEREST_REFUND_TYPES)) {
+            JsonArray supportedTransactionsForInterestRefund = command
+                    .arrayOfParameterNamed(LoanProductConstants.SUPPORTED_INTEREST_REFUND_TYPES);
+            supportedTransactionsForInterestRefund.iterator().forEachRemaining(value -> {
+                supportedInterestRefundTypes.add(LoanSupportedInterestRefundTypes.valueOf(value.getAsString()));
+            });
+        }
+
         return new LoanProduct(fund, loanTransactionProcessingStrategy, loanProductPaymentAllocationRules, loanProductCreditAllocationRules,
                 name, shortName, description, currency, principal, minPrincipal, maxPrincipal, interestRatePerPeriod,
                 minInterestRatePerPeriod, maxInterestRatePerPeriod, interestFrequencyType, annualInterestRate, interestMethod,
@@ -461,7 +470,7 @@ public class LoanProduct extends AbstractPersistableCustom<Long> {
                 allowApprovedDisbursedAmountsOverApplied, overAppliedCalculationType, overAppliedNumber, dueDaysForRepaymentEvent,
                 overDueDaysForRepaymentEvent, enableDownPayment, disbursedAmountPercentageDownPayment, enableAutoRepaymentForDownPayment,
                 repaymentStartDateType, enableInstallmentLevelDelinquency, loanScheduleType, loanScheduleProcessingType, fixedLength,
-                enableAccrualActivityPosting);
+                enableAccrualActivityPosting, supportedInterestRefundTypes);
 
     }
 
@@ -679,7 +688,7 @@ public class LoanProduct extends AbstractPersistableCustom<Long> {
             final boolean enableAutoRepaymentForDownPayment, final RepaymentStartDateType repaymentStartDateType,
             final boolean enableInstallmentLevelDelinquency, final LoanScheduleType loanScheduleType,
             final LoanScheduleProcessingType loanScheduleProcessingType, final Integer fixedLength,
-            final boolean enableAccrualActivityPosting) {
+            final boolean enableAccrualActivityPosting, final List<LoanSupportedInterestRefundTypes> supportedInterestRefundTypes) {
         this.fund = fund;
         this.transactionProcessingStrategyCode = transactionProcessingStrategyCode;
 
@@ -728,7 +737,8 @@ public class LoanProduct extends AbstractPersistableCustom<Long> {
                 recurringMoratoriumOnPrincipalPeriods, graceOnInterestPayment, graceOnInterestCharged, amortizationMethod,
                 inArrearsTolerance, graceOnArrearsAgeing, daysInMonthType.getValue(), daysInYearType.getValue(),
                 isInterestRecalculationEnabled, isEqualAmortization, enableDownPayment, disbursedAmountPercentageForDownPayment,
-                enableAutoRepaymentForDownPayment, loanScheduleType, loanScheduleProcessingType, fixedLength, enableAccrualActivityPosting);
+                enableAutoRepaymentForDownPayment, loanScheduleType, loanScheduleProcessingType, fixedLength, enableAccrualActivityPosting,
+                supportedInterestRefundTypes);
 
         this.loanProductMinMaxConstraints = new LoanProductMinMaxConstraints(defaultMinPrincipal, defaultMaxPrincipal,
                 defaultMinNominalInterestRatePerPeriod, defaultMaxNominalInterestRatePerPeriod, defaultMinNumberOfInstallments,

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

@@ -19,12 +19,14 @@
 package org.apache.fineract.portfolio.loanproduct.domain;
 
 import jakarta.persistence.Column;
+import jakarta.persistence.Convert;
 import jakarta.persistence.Embeddable;
 import jakarta.persistence.Embedded;
 import jakarta.persistence.EnumType;
 import jakarta.persistence.Enumerated;
 import java.math.BigDecimal;
 import java.util.LinkedHashMap;
+import java.util.List;
 import java.util.Map;
 import lombok.Getter;
 import lombok.Setter;
@@ -153,6 +155,10 @@ public class LoanProductRelatedDetail implements LoanProductMinimumRepaymentSche
     @Column(name = "enable_accrual_activity_posting", nullable = false)
     private boolean enableAccrualActivityPosting = false;
 
+    @Convert(converter = SupportedInterestRefundTypesListConverter.class)
+    @Column(name = "supported_interest_refund_types")
+    private List<LoanSupportedInterestRefundTypes> supportedInterestRefundTypes = List.of();
+
     public static LoanProductRelatedDetail createFrom(final MonetaryCurrency currency, final BigDecimal principal,
             final BigDecimal nominalInterestRatePerPeriod, final PeriodFrequencyType interestRatePeriodFrequencyType,
             final BigDecimal nominalAnnualInterestRate, final InterestMethod interestMethod,
@@ -165,7 +171,7 @@ public class LoanProductRelatedDetail implements LoanProductMinimumRepaymentSche
             final boolean enableDownPayment, final BigDecimal disbursedAmountPercentageForDownPayment,
             final boolean enableAutoRepaymentForDownPayment, final LoanScheduleType loanScheduleType,
             final LoanScheduleProcessingType loanScheduleProcessingType, final Integer fixedLength,
-            final boolean enableAccrualActivityPosting) {
+            final boolean enableAccrualActivityPosting, final List<LoanSupportedInterestRefundTypes> supportedInterestRefundTypes) {
 
         return new LoanProductRelatedDetail(currency, principal, nominalInterestRatePerPeriod, interestRatePeriodFrequencyType,
                 nominalAnnualInterestRate, interestMethod, interestCalculationPeriodMethod, allowPartialPeriodInterestCalcualtion,
@@ -173,7 +179,7 @@ public class LoanProductRelatedDetail implements LoanProductMinimumRepaymentSche
                 recurringMoratoriumOnPrincipalPeriods, graceOnInterestPayment, graceOnInterestCharged, amortizationMethod,
                 inArrearsTolerance, graceOnArrearsAgeing, daysInMonthType, daysInYearType, isInterestRecalculationEnabled,
                 isEqualAmortization, enableDownPayment, disbursedAmountPercentageForDownPayment, enableAutoRepaymentForDownPayment,
-                loanScheduleType, loanScheduleProcessingType, fixedLength, enableAccrualActivityPosting);
+                loanScheduleType, loanScheduleProcessingType, fixedLength, enableAccrualActivityPosting, supportedInterestRefundTypes);
     }
 
     protected LoanProductRelatedDetail() {
@@ -192,7 +198,7 @@ public class LoanProductRelatedDetail implements LoanProductMinimumRepaymentSche
             final boolean enableDownPayment, final BigDecimal disbursedAmountPercentageForDownPayment,
             final boolean enableAutoRepaymentForDownPayment, final LoanScheduleType loanScheduleType,
             final LoanScheduleProcessingType loanScheduleProcessingType, final Integer fixedLength,
-            final boolean enableAccrualActivityPosting) {
+            final boolean enableAccrualActivityPosting, List<LoanSupportedInterestRefundTypes> supportedInterestRefundTypes) {
         this.currency = currency;
         this.principal = defaultPrincipal;
         this.nominalInterestRatePerPeriod = defaultNominalInterestRatePerPeriod;
@@ -226,6 +232,7 @@ public class LoanProductRelatedDetail implements LoanProductMinimumRepaymentSche
         this.loanScheduleType = loanScheduleType;
         this.loanScheduleProcessingType = loanScheduleProcessingType;
         this.enableAccrualActivityPosting = enableAccrualActivityPosting;
+        this.supportedInterestRefundTypes = supportedInterestRefundTypes;
     }
 
     private Integer defaultToNullIfZero(final Integer value) {

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

@@ -0,0 +1,47 @@
+/**
+ * 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.loanproduct.domain;
+
+import java.util.Arrays;
+import java.util.List;
+import lombok.Getter;
+import lombok.RequiredArgsConstructor;
+import org.apache.fineract.infrastructure.core.data.StringEnumOptionData;
+import org.apache.fineract.portfolio.loanaccount.domain.LoanTransactionType;
+
+@Getter
+@RequiredArgsConstructor
+public enum LoanSupportedInterestRefundTypes {
+
+    MERCHANT_ISSUED_REFUND(LoanTransactionType.MERCHANT_ISSUED_REFUND, "loanRefundType.merchant_issued_refund", "Merchant issued refund"), //
+    PAYOUT_REFUND(LoanTransactionType.PAYOUT_REFUND, "loanRefundType.payout_refund", "Payout refund"), //
+    ;
+
+    private final LoanTransactionType transactionType;
+    private final String code;
+    private final String humanReadableName;
+
+    public static List<StringEnumOptionData> getValuesAsStringEnumOptionDataList() {
+        return Arrays.stream(values()).map(v -> new StringEnumOptionData(v.name(), v.getCode(), v.getHumanReadableName())).toList();
+    }
+
+    public StringEnumOptionData getValueAsStringEnumOptionData() {
+        return new StringEnumOptionData(name(), getCode(), getHumanReadableName());
+    }
+}

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

@@ -41,7 +41,8 @@ public enum PaymentAllocationTransactionType {
     WAIVE_INTEREST(LoanTransactionType.WAIVE_INTEREST, "Waive interest"), //
     CHARGE_PAYMENT(LoanTransactionType.CHARGE_PAYMENT, "Charge payment"), //
     REFUND_FOR_ACTIVE_LOAN(LoanTransactionType.REFUND_FOR_ACTIVE_LOAN, "Refund for active loan"), //
-    INTEREST_PAYMENT_WAIVER(LoanTransactionType.INTEREST_PAYMENT_WAIVER, "Interest payment waiver");
+    INTEREST_PAYMENT_WAIVER(LoanTransactionType.INTEREST_PAYMENT_WAIVER, "Interest payment waiver"), //
+    INTEREST_REFUND(LoanTransactionType.INTEREST_REFUND, "Interest refund");
 
     private final LoanTransactionType loanTransactionType;
     private final String humanReadableName;

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

@@ -0,0 +1,41 @@
+/**
+ * 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.loanproduct.domain;
+
+// TODO FINERACT-1932-Fineract modularization: Move to fineract-progressive-loan module after refactor of Loan and LoanProduct classes
+
+import jakarta.persistence.AttributeConverter;
+import jakarta.persistence.Converter;
+import java.util.List;
+import org.apache.fineract.infrastructure.core.data.GenericEnumListConverter;
+
+@Converter(autoApply = true)
+public class SupportedInterestRefundTypesListConverter extends GenericEnumListConverter<LoanSupportedInterestRefundTypes>
+        implements AttributeConverter<List<LoanSupportedInterestRefundTypes>, String> {
+
+    @Override
+    public boolean isUnique() {
+        return true;
+    }
+
+    public SupportedInterestRefundTypesListConverter() {
+        super(LoanSupportedInterestRefundTypes.class);
+    }
+
+}

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

@@ -321,6 +321,8 @@ public final class LoanEnumerations {
                     LoanTransactionType.REAMORTIZE.getCode(), "Re-amortize");
             case ACCRUAL_ACTIVITY -> new LoanTransactionEnumData(LoanTransactionType.ACCRUAL_ACTIVITY.getValue().longValue(),
                     LoanTransactionType.ACCRUAL_ACTIVITY.getCode(), "Accrual Activity");
+            case INTEREST_REFUND -> new LoanTransactionEnumData(LoanTransactionType.INTEREST_REFUND.getValue().longValue(),
+                    LoanTransactionType.INTEREST_REFUND.getCode(), "Interest Refund");
         };
     }
 

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

@@ -44,4 +44,5 @@
   <include relativeToChangelogFile="true" file="parts/1019_add_fixed_length.xml"/>
   <include relativeToChangelogFile="true" file="parts/1020_add_re_aged_flag_to_loan_installment.xml"/>
   <include relativeToChangelogFile="true" file="parts/1021_add_loan_status_change_history.xml"/>
+  <include relativeToChangelogFile="true" file="parts/1022_add_interest_refund_support.xml"/>
 </databaseChangeLog>

fineract-loan/src/main/resources/db/changelog/tenant/module/loan/parts/1022_add_interest_refund_support.xml

@@ -0,0 +1,36 @@
+<?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-4.3.xsd">
+
+    <changeSet author="fineract" id="1022-1">
+        <addColumn tableName="m_product_loan">
+            <column name="supported_interest_refund_types" type="TEXT"/>
+        </addColumn>
+    </changeSet>
+    <changeSet author="fineract" id="1022-2">
+        <addColumn tableName="m_loan">
+            <column name="supported_interest_refund_types" type="TEXT"/>
+        </addColumn>
+    </changeSet>
+</databaseChangeLog>

fineract-progressive-loan/src/main/resources/jpa/progressiveloan/persistence.xml

@@ -114,6 +114,7 @@
         <class>org.apache.fineract.portfolio.loanaccount.domain.LoanCreditAllocationRule</class>
         <class>org.apache.fineract.portfolio.loanproduct.domain.CreditAllocationTransactionType</class>
         <class>org.apache.fineract.portfolio.loanproduct.domain.PaymentAllocationTypeListConverter</class>
+        <class>org.apache.fineract.portfolio.loanproduct.domain.SupportedInterestRefundTypesListConverter</class>
         <class>org.apache.fineract.portfolio.loanaccount.domain.reaging.LoanReAgeParameter</class>
         <class>org.apache.fineract.portfolio.loanaccount.rescheduleloan.domain.LoanRescheduleRequest</class>
         <class>org.apache.fineract.portfolio.repaymentwithpostdatedchecks.domain.PostDatedChecks</class>

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

@@ -522,7 +522,8 @@ public class LoanScheduleAssembler {
                 fixedPrincipalPercentagePerInstallment, isPrincipalCompoundingDisabledForOverdueLoans, isDownPaymentEnabled,
                 disbursedAmountPercentageForDownPayment, isAutoRepaymentForDownPaymentEnabled, repaymentStartDateType, submittedOnDate,
                 loanScheduleType, loanScheduleProcessingType, fixedLength,
-                loanProduct.getLoanProductRelatedDetail().isEnableAccrualActivityPosting());
+                loanProduct.getLoanProductRelatedDetail().isEnableAccrualActivityPosting(),
+                loanProduct.getLoanProductRelatedDetail().getSupportedInterestRefundTypes());
     }
 
     private CalendarInstance createCalendarForSameAsRepayment(final Integer repaymentEvery,

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

@@ -59,6 +59,7 @@ import org.apache.fineract.infrastructure.core.api.ApiParameterHelper;
 import org.apache.fineract.infrastructure.core.api.ApiRequestParameterHelper;
 import org.apache.fineract.infrastructure.core.data.CommandProcessingResult;
 import org.apache.fineract.infrastructure.core.data.EnumOptionData;
+import org.apache.fineract.infrastructure.core.data.StringEnumOptionData;
 import org.apache.fineract.infrastructure.core.domain.ExternalId;
 import org.apache.fineract.infrastructure.core.serialization.ApiRequestJsonSerializationSettings;
 import org.apache.fineract.infrastructure.core.serialization.DefaultToApiJsonSerializer;
@@ -84,6 +85,7 @@ import org.apache.fineract.portfolio.loanproduct.data.TransactionProcessingStrat
 import org.apache.fineract.portfolio.loanproduct.domain.AllocationType;
 import org.apache.fineract.portfolio.loanproduct.domain.CreditAllocationTransactionType;
 import org.apache.fineract.portfolio.loanproduct.domain.FutureInstallmentAllocationRule;
+import org.apache.fineract.portfolio.loanproduct.domain.LoanSupportedInterestRefundTypes;
 import org.apache.fineract.portfolio.loanproduct.domain.PaymentAllocationTransactionType;
 import org.apache.fineract.portfolio.loanproduct.domain.PaymentAllocationType;
 import org.apache.fineract.portfolio.loanproduct.exception.LoanProductNotFoundException;
@@ -421,6 +423,8 @@ public class LoanProductsApiResource {
         final List<EnumOptionData> advancedPaymentAllocationTypes = PaymentAllocationType.getValuesAsEnumOptionDataList();
         final List<EnumOptionData> creditAllocationTransactionTypes = CreditAllocationTransactionType.getValuesAsEnumOptionDataList();
         final List<EnumOptionData> creditAllocationAllocationTypes = AllocationType.getValuesAsEnumOptionDataList();
+        final List<StringEnumOptionData> supportedInterestRefundTypesOptions = LoanSupportedInterestRefundTypes
+                .getValuesAsStringEnumOptionDataList();
 
         return new LoanProductData(productData, chargeOptions, penaltyOptions, paymentTypeOptions, currencyOptions, amortizationTypeOptions,
                 interestTypeOptions, interestCalculationPeriodTypeOptions, repaymentFrequencyTypeOptions, interestRateFrequencyTypeOptions,
@@ -432,7 +436,7 @@ public class LoanProductsApiResource {
                 advancedPaymentAllocationTransactionTypes, advancedPaymentAllocationFutureInstallmentAllocationRules,
                 advancedPaymentAllocationTypes, LoanScheduleType.getValuesAsEnumOptionDataList(),
                 LoanScheduleProcessingType.getValuesAsEnumOptionDataList(), creditAllocationTransactionTypes,
-                creditAllocationAllocationTypes);
+                creditAllocationAllocationTypes, supportedInterestRefundTypesOptions);
     }
 
 }

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

@@ -61,6 +61,7 @@ import org.apache.fineract.portfolio.loanproduct.domain.LoanPreClosureInterestCa
 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.LoanSupportedInterestRefundTypes;
 import org.apache.fineract.portfolio.loanproduct.domain.RecalculationFrequencyType;
 import org.apache.fineract.portfolio.loanproduct.exception.EqualAmortizationUnsupportedFeatureException;
 import org.springframework.stereotype.Component;
@@ -175,7 +176,7 @@ public final class LoanProductDataValidator {
             LoanProductConstants.ENABLE_AUTO_REPAYMENT_DOWN_PAYMENT, LoanProductConstants.REPAYMENT_START_DATE_TYPE,
             LoanProductConstants.ENABLE_INSTALLMENT_LEVEL_DELINQUENCY, LoanProductConstants.LOAN_SCHEDULE_TYPE,
             LoanProductConstants.LOAN_SCHEDULE_PROCESSING_TYPE, LoanProductConstants.FIXED_LENGTH,
-            LoanProductConstants.ENABLE_ACCRUAL_ACTIVITY_POSTING));
+            LoanProductConstants.ENABLE_ACCRUAL_ACTIVITY_POSTING, LoanProductConstants.SUPPORTED_INTEREST_REFUND_TYPES));
 
     private static final String[] SUPPORTED_LOAN_CONFIGURABLE_ATTRIBUTES = { LoanProductConstants.amortizationTypeParamName,
             LoanProductConstants.interestTypeParamName, LoanProductConstants.transactionProcessingStrategyCodeParamName,
@@ -841,6 +842,19 @@ public final class LoanProductDataValidator {
         validateRepaymentPeriodWithGraceSettings(numberOfRepayments, graceOnPrincipalPayment, graceOnInterestPayment,
                 graceOnInterestCharged, recurringMoratoriumOnPrincipalPeriods, baseDataValidator);
 
+        if (AdvancedPaymentScheduleTransactionProcessor.ADVANCED_PAYMENT_ALLOCATION_STRATEGY.equals(transactionProcessingStrategyCode)
+                && this.fromApiJsonHelper.parameterExists(LoanProductConstants.SUPPORTED_INTEREST_REFUND_TYPES, element)) {
+            String[] supportedTransactionsForInterestRefund = this.fromApiJsonHelper
+                    .extractArrayNamed(LoanProductConstants.SUPPORTED_INTEREST_REFUND_TYPES, element);
+            Arrays.stream(supportedTransactionsForInterestRefund)
+                    .forEach(value -> baseDataValidator.reset().parameter(LoanProductConstants.SUPPORTED_INTEREST_REFUND_TYPES).value(value)
+                            .isOneOfEnumValues(LoanSupportedInterestRefundTypes.class));
+        } else if (this.fromApiJsonHelper.parameterExists(LoanProductConstants.SUPPORTED_INTEREST_REFUND_TYPES, element)) {
+            baseDataValidator.reset().parameter(LoanProductConstants.SUPPORTED_INTEREST_REFUND_TYPES).failWithCode(
+                    "supported.only.for.progressive.loan.schedule.handling",
+                    "Automatic interest refund functionality is only supported for Progressive loans");
+        }
+
         throwExceptionIfValidationWarningsExist(dataValidationErrors);
     }
 

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

@@ -30,6 +30,7 @@ import java.util.concurrent.atomic.AtomicInteger;
 import lombok.RequiredArgsConstructor;
 import org.apache.fineract.accounting.common.AccountingEnumerations;
 import org.apache.fineract.infrastructure.core.data.EnumOptionData;
+import org.apache.fineract.infrastructure.core.data.StringEnumOptionData;
 import org.apache.fineract.infrastructure.core.domain.ExternalId;
 import org.apache.fineract.infrastructure.core.domain.JdbcSupport;
 import org.apache.fineract.infrastructure.core.service.DateUtils;
@@ -56,6 +57,7 @@ import org.apache.fineract.portfolio.loanproduct.domain.LoanProduct;
 import org.apache.fineract.portfolio.loanproduct.domain.LoanProductConfigurableAttributes;
 import org.apache.fineract.portfolio.loanproduct.domain.LoanProductParamType;
 import org.apache.fineract.portfolio.loanproduct.domain.LoanProductRepository;
+import org.apache.fineract.portfolio.loanproduct.domain.LoanSupportedInterestRefundTypes;
 import org.apache.fineract.portfolio.loanproduct.exception.LoanProductNotFoundException;
 import org.apache.fineract.portfolio.rate.data.RateData;
 import org.apache.fineract.portfolio.rate.service.RateReadService;
@@ -276,7 +278,7 @@ 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.loan_schedule_type as loanScheduleType, lp.loan_schedule_processing_type as loanScheduleProcessingType  "
+                    + "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, lp.supported_interest_refund_types as supportedInterestRefundTypes  "
                     + " 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 "
@@ -526,6 +528,13 @@ public class LoanProductReadPlatformServiceImpl implements LoanProductReadPlatfo
             final String loanScheduleProcessingTypeStr = rs.getString("loanScheduleProcessingType");
             final LoanScheduleProcessingType loanScheduleProcessingType = LoanScheduleProcessingType.valueOf(loanScheduleProcessingTypeStr);
             final boolean enableAccrualActivityPosting = rs.getBoolean("enableAccrualActivityPosting");
+            final String supportedInterestRefundTypesString = rs.getString("supportedInterestRefundTypes");
+            List<StringEnumOptionData> supportedInterestRefundTypes = List.of();
+            if (supportedInterestRefundTypesString != null && !supportedInterestRefundTypesString.isEmpty()) {
+                supportedInterestRefundTypes = Arrays.stream(supportedInterestRefundTypesString.split(","))
+                        .map(LoanSupportedInterestRefundTypes::valueOf)
+                        .map(LoanSupportedInterestRefundTypes::getValueAsStringEnumOptionData).toList();
+            }
 
             return new LoanProductData(id, name, shortName, description, currency, principal, minPrincipal, maxPrincipal, tolerance,
                     numberOfRepayments, minNumberOfRepayments, maxNumberOfRepayments, repaymentEvery, interestRatePerPeriod,
@@ -548,7 +557,7 @@ public class LoanProductReadPlatformServiceImpl implements LoanProductReadPlatfo
                     dueDaysForRepaymentEvent, overDueDaysForRepaymentEvent, enableDownPayment, disbursedAmountPercentageForDownPayment,
                     enableAutoRepaymentForDownPayment, advancedPaymentData, creditAllocationData, repaymentStartDateType,
                     enableInstallmentLevelDelinquency, loanScheduleType.asEnumOptionData(), loanScheduleProcessingType.asEnumOptionData(),
-                    fixedLength, enableAccrualActivityPosting);
+                    fixedLength, enableAccrualActivityPosting, supportedInterestRefundTypes);
         }
     }
 

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

@@ -60,6 +60,7 @@ import org.apache.fineract.portfolio.loanproduct.domain.LoanProduct;
 import org.apache.fineract.portfolio.loanproduct.domain.LoanProductCreditAllocationRule;
 import org.apache.fineract.portfolio.loanproduct.domain.LoanProductPaymentAllocationRule;
 import org.apache.fineract.portfolio.loanproduct.domain.LoanProductRepository;
+import org.apache.fineract.portfolio.loanproduct.domain.LoanSupportedInterestRefundTypes;
 import org.apache.fineract.portfolio.loanproduct.exception.LoanProductCannotBeModifiedDueToNonClosedLoansException;
 import org.apache.fineract.portfolio.loanproduct.exception.LoanProductDateException;
 import org.apache.fineract.portfolio.loanproduct.exception.LoanProductNotFoundException;
@@ -122,6 +123,7 @@ public class LoanProductWritePlatformServiceJpaRepositoryImpl implements LoanPro
             }
             final LoanProduct loanProduct = LoanProduct.assembleFromJson(fund, loanTransactionProcessingStrategyCode, charges, command,
                     this.aprCalculator, floatingRate, rates, loanProductPaymentAllocationRules, loanProductCreditAllocationRules);
+
             loanProduct.updateLoanProductInRelatedClasses();
             loanProduct.setTransactionProcessingStrategyName(
                     loanRepaymentScheduleTransactionProcessorFactory.determineProcessor(loanTransactionProcessingStrategyCode).getName());
@@ -264,6 +266,16 @@ public class LoanProductWritePlatformServiceJpaRepositoryImpl implements LoanPro
                 }
             }
 
+            if (command.parameterExists(LoanProductConstants.SUPPORTED_INTEREST_REFUND_TYPES)) {
+                JsonArray supportedTransactionsForInterestRefund = command
+                        .arrayOfParameterNamed(LoanProductConstants.SUPPORTED_INTEREST_REFUND_TYPES);
+                List<LoanSupportedInterestRefundTypes> supportedInterestRefundTypes = new ArrayList<>();
+                supportedTransactionsForInterestRefund.iterator().forEachRemaining(value -> {
+                    supportedInterestRefundTypes.add(LoanSupportedInterestRefundTypes.valueOf(value.getAsString()));
+                });
+                product.getLoanProductRelatedDetail().setSupportedInterestRefundTypes(supportedInterestRefundTypes);
+            }
+
             if (!changes.isEmpty()) {
                 product.validateLoanProductPreSave();
                 this.loanProductRepository.saveAndFlush(product);

fineract-provider/src/main/resources/jpa/persistence.xml

@@ -121,6 +121,7 @@
         <class>org.apache.fineract.portfolio.loanaccount.domain.LoanCreditAllocationRule</class>
         <class>org.apache.fineract.portfolio.loanproduct.domain.CreditAllocationTransactionType</class>
         <class>org.apache.fineract.portfolio.loanproduct.domain.PaymentAllocationTypeListConverter</class>
+        <class>org.apache.fineract.portfolio.loanproduct.domain.SupportedInterestRefundTypesListConverter</class>
         <class>org.apache.fineract.portfolio.loanaccount.domain.reaging.LoanReAgeParameter</class>
         <class>org.apache.fineract.portfolio.loanaccount.rescheduleloan.domain.LoanRescheduleRequest</class>
         <class>org.apache.fineract.portfolio.repaymentwithpostdatedchecks.domain.PostDatedChecks</class>

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

@@ -95,7 +95,7 @@ public class DefaultScheduledDateGeneratorTest {
                 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, CUMULATIVE, LoanScheduleProcessingType.HORIZONTAL, null, false);
+                submittedOnDate, CUMULATIVE, LoanScheduleProcessingType.HORIZONTAL, null, false, null);
 
         // when
         List<PreGeneratedLoanSchedulePeriod> result = underTest.generateRepaymentPeriods(expectedDisbursementDate, loanApplicationTerms,
@@ -166,7 +166,7 @@ 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, CUMULATIVE, LoanScheduleProcessingType.HORIZONTAL, null, false);
+                DISBURSEMENT_DATE, submittedOnDate, CUMULATIVE, LoanScheduleProcessingType.HORIZONTAL, null, false, null);
     }
 
     private HolidayDetailDTO createHolidayDTO() {

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

@@ -28,6 +28,7 @@ import java.util.List;
 import java.util.Map;
 import java.util.Optional;
 import java.util.concurrent.atomic.AtomicInteger;
+import java.util.function.Consumer;
 import lombok.extern.slf4j.Slf4j;
 import org.apache.fineract.accounting.common.AccountingConstants;
 import org.apache.fineract.client.models.AdvancedPaymentData;
@@ -94,7 +95,8 @@ public class LoanProductWithAdvancedPaymentAllocationIntegrationTests {
         AdvancedPaymentData repaymentPaymentAllocation = createRepaymentPaymentAllocation();
 
         // when
-        Integer loanProductId = LOAN_TRANSACTION_HELPER.getLoanProductId(createLoanJSON(defaultAllocation, repaymentPaymentAllocation));
+        Integer loanProductId = LOAN_TRANSACTION_HELPER.getLoanProductId(loanProductTestBuilder(
+                customization -> customization.addAdvancedPaymentAllocation(defaultAllocation, repaymentPaymentAllocation)));
         Assertions.assertNotNull(loanProductId);
         GetLoanProductsProductIdResponse loanProduct = LOAN_TRANSACTION_HELPER.getLoanProduct(loanProductId);
 
@@ -117,7 +119,8 @@ public class LoanProductWithAdvancedPaymentAllocationIntegrationTests {
         // given a loan with two allocations
         AdvancedPaymentData defaultAllocation = createDefaultPaymentAllocation();
         AdvancedPaymentData repaymentPaymentAllocation = createRepaymentPaymentAllocation();
-        Integer loanProductId = LOAN_TRANSACTION_HELPER.getLoanProductId(createLoanJSON(defaultAllocation, repaymentPaymentAllocation));
+        Integer loanProductId = LOAN_TRANSACTION_HELPER.getLoanProductId(loanProductTestBuilder(
+                customization -> customization.addAdvancedPaymentAllocation(defaultAllocation, repaymentPaymentAllocation)));
         Assertions.assertNotNull(loanProductId);
         GetLoanProductsProductIdResponse loanProduct = LOAN_TRANSACTION_HELPER.getLoanProduct(loanProductId);
         Assertions.assertNotNull(loanProduct.getPaymentAllocation());
@@ -138,7 +141,8 @@ public class LoanProductWithAdvancedPaymentAllocationIntegrationTests {
         // given a loan with one allocation
         AdvancedPaymentData defaultAllocation = createDefaultPaymentAllocation();
         AdvancedPaymentData repaymentPaymentAllocation = createRepaymentPaymentAllocation();
-        Integer loanProductId = LOAN_TRANSACTION_HELPER.getLoanProductId(createLoanJSON(defaultAllocation));
+        Integer loanProductId = LOAN_TRANSACTION_HELPER
+                .getLoanProductId(loanProductTestBuilder(customization -> customization.addAdvancedPaymentAllocation(defaultAllocation)));
         Assertions.assertNotNull(loanProductId);
         GetLoanProductsProductIdResponse loanProduct = LOAN_TRANSACTION_HELPER.getLoanProduct(loanProductId);
         Assertions.assertNotNull(loanProduct.getPaymentAllocation());
@@ -168,7 +172,8 @@ public class LoanProductWithAdvancedPaymentAllocationIntegrationTests {
         // given a loan with two allocations
         AdvancedPaymentData defaultAllocation = createDefaultPaymentAllocation();
         AdvancedPaymentData repaymentPaymentAllocation = createRepaymentPaymentAllocation();
-        Integer loanProductId = LOAN_TRANSACTION_HELPER.getLoanProductId(createLoanJSON(defaultAllocation, repaymentPaymentAllocation));
+        Integer loanProductId = LOAN_TRANSACTION_HELPER.getLoanProductId(loanProductTestBuilder(
+                customization -> customization.addAdvancedPaymentAllocation(defaultAllocation, repaymentPaymentAllocation)));
         Assertions.assertNotNull(loanProductId);
         GetLoanProductsProductIdResponse loanProduct = LOAN_TRANSACTION_HELPER.getLoanProduct(loanProductId);
         Assertions.assertNotNull(loanProduct.getPaymentAllocation());
@@ -188,7 +193,8 @@ public class LoanProductWithAdvancedPaymentAllocationIntegrationTests {
         // given a loan with two allocations
         AdvancedPaymentData defaultAllocation = createDefaultPaymentAllocation();
         AdvancedPaymentData repaymentPaymentAllocation = createRepaymentPaymentAllocation();
-        Integer loanProductId = LOAN_TRANSACTION_HELPER.getLoanProductId(createLoanJSON(defaultAllocation, repaymentPaymentAllocation));
+        Integer loanProductId = LOAN_TRANSACTION_HELPER.getLoanProductId(loanProductTestBuilder(
+                customization -> customization.addAdvancedPaymentAllocation(defaultAllocation, repaymentPaymentAllocation)));
         Assertions.assertNotNull(loanProductId);
         GetLoanProductsProductIdResponse loanProduct = LOAN_TRANSACTION_HELPER.getLoanProduct(loanProductId);
         Assertions.assertNotNull(loanProduct.getPaymentAllocation());
@@ -229,8 +235,8 @@ public class LoanProductWithAdvancedPaymentAllocationIntegrationTests {
         LoanTransactionHelper validationErrorHelper = new LoanTransactionHelper(REQUEST_SPEC, errorResponse);
 
         // when
-        List<Map<String, String>> loanProductError = validationErrorHelper.getLoanProductError(createLoanJSON(repaymentPaymentAllocation),
-                "errors");
+        List<Map<String, String>> loanProductError = validationErrorHelper.getLoanProductError(
+                loanProductTestBuilder(customization -> customization.addAdvancedPaymentAllocation(repaymentPaymentAllocation)), "errors");
         Assertions.assertEquals("Advanced-payment-allocation-strategy was selected but no DEFAULT payment allocation was provided",
                 loanProductError.get(0).get("defaultUserMessage"));
     }
@@ -242,8 +248,8 @@ public class LoanProductWithAdvancedPaymentAllocationIntegrationTests {
         AdvancedPaymentData interestPaymentWaiverAllocation = createInterestPaymentWaiverAllocation();
 
         // when
-        Integer loanProductId = LOAN_TRANSACTION_HELPER
-                .getLoanProductId(createLoanJSON(defaultAllocation, interestPaymentWaiverAllocation));
+        Integer loanProductId = LOAN_TRANSACTION_HELPER.getLoanProductId(loanProductTestBuilder(
+                customization -> customization.addAdvancedPaymentAllocation(defaultAllocation, interestPaymentWaiverAllocation)));
         Assertions.assertNotNull(loanProductId);
         GetLoanProductsProductIdResponse loanProduct = LOAN_TRANSACTION_HELPER.getLoanProduct(loanProductId);
 
@@ -266,7 +272,8 @@ public class LoanProductWithAdvancedPaymentAllocationIntegrationTests {
         // given a loan with one allocation
         AdvancedPaymentData defaultAllocation = createDefaultPaymentAllocation();
         AdvancedPaymentData interestPaymentWaiverAllocation = createInterestPaymentWaiverAllocation();
-        Integer loanProductId = LOAN_TRANSACTION_HELPER.getLoanProductId(createLoanJSON(defaultAllocation));
+        Integer loanProductId = LOAN_TRANSACTION_HELPER
+                .getLoanProductId(loanProductTestBuilder(customization -> customization.addAdvancedPaymentAllocation(defaultAllocation)));
         Assertions.assertNotNull(loanProductId);
         GetLoanProductsProductIdResponse loanProduct = LOAN_TRANSACTION_HELPER.getLoanProduct(loanProductId);
         Assertions.assertNotNull(loanProduct.getPaymentAllocation());
@@ -291,14 +298,81 @@ public class LoanProductWithAdvancedPaymentAllocationIntegrationTests {
         Assertions.assertEquals(interestPaymentWaiverAllocation, second.get());
     }
 
-    private String createLoanJSON(AdvancedPaymentData... advancedPaymentData) {
-        return new LoanProductTestBuilder().withPrincipal("15,000.00").withNumberOfRepayments("4").withRepaymentAfterEvery("1")
-                .withRepaymentTypeAsMonth().withinterestRatePerPeriod("1")
+    @Test
+    public void testCreateAndReadProgressiveLoanProductWithInterestRefund() {
+        // given
+        AdvancedPaymentData defaultAllocation = createDefaultPaymentAllocation();
+        AdvancedPaymentData repaymentPaymentAllocation = createRepaymentPaymentAllocation();
+
+        // when
+        String loanProductRequest = loanProductTestBuilder(
+                customization -> customization.addAdvancedPaymentAllocation(defaultAllocation, repaymentPaymentAllocation));
+
+        Integer loanProductId = LOAN_TRANSACTION_HELPER.getLoanProductId(loanProductRequest);
+        Assertions.assertNotNull(loanProductId);
+        GetLoanProductsProductIdResponse loanProduct = LOAN_TRANSACTION_HELPER.getLoanProduct(loanProductId);
+
+        // then
+        Assertions.assertNotNull(loanProduct.getSupportedInterestRefundTypes());
+        Assertions.assertEquals(0, loanProduct.getSupportedInterestRefundTypes().size());
+
+        // when a new interest refund transaction was added
+        LOAN_TRANSACTION_HELPER.updateLoanProduct(loanProductId.longValue(),
+                new PutLoanProductsProductIdRequest().supportedInterestRefundTypes(List.of("MERCHANT_ISSUED_REFUND")));
+
+        loanProduct = LOAN_TRANSACTION_HELPER.getLoanProduct(loanProductId);
+
+        // then
+        Assertions.assertNotNull(loanProduct.getSupportedInterestRefundTypes());
+        Assertions.assertEquals(1, loanProduct.getSupportedInterestRefundTypes().size());
+        Assertions.assertEquals("MERCHANT_ISSUED_REFUND", loanProduct.getSupportedInterestRefundTypes().get(0).getId());
+
+        // Set both of them at creation
+        String loanProductRequest2 = loanProductTestBuilder(
+                customization -> customization.addAdvancedPaymentAllocation(defaultAllocation, repaymentPaymentAllocation)
+                        .withSupportedInterestRefundTypes("PAYOUT_REFUND", "MERCHANT_ISSUED_REFUND"));
+        Integer loanProductId2 = LOAN_TRANSACTION_HELPER.getLoanProductId(loanProductRequest2);
+        Assertions.assertNotNull(loanProductId2);
+        GetLoanProductsProductIdResponse loanProduct2 = LOAN_TRANSACTION_HELPER.getLoanProduct(loanProductId2);
+
+        // then
+        Assertions.assertNotNull(loanProduct2.getSupportedInterestRefundTypes());
+        Assertions.assertEquals(2, loanProduct2.getSupportedInterestRefundTypes().size());
+        Assertions.assertEquals("PAYOUT_REFUND", loanProduct2.getSupportedInterestRefundTypes().get(0).getId());
+        Assertions.assertEquals("MERCHANT_ISSUED_REFUND", loanProduct2.getSupportedInterestRefundTypes().get(1).getId());
+
+        // Remove the previously configured transactions
+        LOAN_TRANSACTION_HELPER.updateLoanProduct(loanProductId2.longValue(),
+                new PutLoanProductsProductIdRequest().supportedInterestRefundTypes(List.of()));
+        loanProduct2 = LOAN_TRANSACTION_HELPER.getLoanProduct(loanProductId2);
+        // then
+        Assertions.assertNotNull(loanProduct2.getSupportedInterestRefundTypes());
+        Assertions.assertEquals(0, loanProduct2.getSupportedInterestRefundTypes().size());
+    }
+
+    @Test
+    public void testCreateCumulativeLoanProductWithInterestRefund() {
+        // given
+        // when
+        String loanProductRequest = loanProductTestBuilder(customization -> customization.withSupportedInterestRefundTypes("PAYOUT_REFUND")
+                .withLoanScheduleType(LoanScheduleType.CUMULATIVE).withRepaymentStrategy("mifos-standard-strategy"));
+        LoanTransactionHelper loanTransactionHelperBadRequest = new LoanTransactionHelper(REQUEST_SPEC,
+                new ResponseSpecBuilder().expectStatusCode(400).build());
+        List<Map<String, String>> loanProductError = loanTransactionHelperBadRequest.getLoanProductError(loanProductRequest, "errors");
+        Assertions.assertEquals(
+                "validation.msg.loanproduct.supportedInterestRefundTypes.supported.only.for.progressive.loan.schedule.handling",
+                loanProductError.get(0).get("userMessageGlobalisationCode"));
+    }
+
+    private String loanProductTestBuilder(Consumer<LoanProductTestBuilder> customization) {
+        LoanProductTestBuilder builder = new LoanProductTestBuilder().withPrincipal("15,000.00").withNumberOfRepayments("4")
+                .withRepaymentAfterEvery("1").withRepaymentTypeAsMonth().withinterestRatePerPeriod("1")
                 .withAccountingRulePeriodicAccrual(new Account[] { ASSET_ACCOUNT, EXPENSE_ACCOUNT, INCOME_ACCOUNT, OVERPAYMENT_ACCOUNT })
                 .withInterestRateFrequencyTypeAsMonths().withAmortizationTypeAsEqualInstallments().withInterestTypeAsDecliningBalance()
-                .withFeeAndPenaltyAssetAccount(FEE_PENALTY_ACCOUNT).addAdvancedPaymentAllocation(advancedPaymentData)
-                .withLoanScheduleType(LoanScheduleType.PROGRESSIVE).withLoanScheduleProcessingType(LoanScheduleProcessingType.HORIZONTAL)
-                .build();
+                .withFeeAndPenaltyAssetAccount(FEE_PENALTY_ACCOUNT).withLoanScheduleType(LoanScheduleType.PROGRESSIVE)
+                .withLoanScheduleProcessingType(LoanScheduleProcessingType.HORIZONTAL);
+        customization.accept(builder);
+        return builder.build();
     }
 
     private PutLoanProductsProductIdRequest updateLoanProductRequest(AdvancedPaymentData... advancedPaymentData) {

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

@@ -160,6 +160,7 @@ public class LoanProductTestBuilder {
     private String loanScheduleType = LoanScheduleType.CUMULATIVE.name();
     private String loanScheduleProcessingType = LoanScheduleProcessingType.HORIZONTAL.name();
     private FullAccountingConfig fullAccountingConfig;
+    private List<String> supportedInterestRefundTypes = null;
 
     public String build() {
         final HashMap<String, Object> map = build(null, null);
@@ -320,6 +321,10 @@ public class LoanProductTestBuilder {
             map.put("repaymentStartDateType", repaymentStartDateType);
         }
 
+        if (this.supportedInterestRefundTypes != null) {
+            map.put("supportedInterestRefundTypes", supportedInterestRefundTypes);
+        }
+
         return map;
     }
 
@@ -776,6 +781,11 @@ public class LoanProductTestBuilder {
         return this;
     }
 
+    public LoanProductTestBuilder withSupportedInterestRefundTypes(String... refundTypes) {
+        this.supportedInterestRefundTypes = List.of(refundTypes);
+        return this;
+    }
+
     public String getTransactionProcessingStrategyCode() {
         return transactionProcessingStrategyCode;
     }