diff --git a/src/app/loans/loans-view/loan-account-actions/loan-reschedule/loan-reschedule.component.ts b/src/app/loans/loans-view/loan-account-actions/loan-reschedule/loan-reschedule.component.ts
index b7e2c443a..78957b591 100644
--- a/src/app/loans/loans-view/loan-account-actions/loan-reschedule/loan-reschedule.component.ts
+++ b/src/app/loans/loans-view/loan-account-actions/loan-reschedule/loan-reschedule.component.ts
@@ -126,11 +126,25 @@ export class LoanRescheduleComponent implements OnInit {
     };
     data.loanId = this.loanId;
 
-    // Add waived penalty charge IDs if penalties are being waived
+    // Waive penalties first if selected, then submit reschedule
     if (this.waivePenalties.value && this.selectedPenalties.length > 0) {
-      data.chargeIds = this.selectedPenalties;
+      this.penaltyManagementService.waivePenalties(this.loanId, this.selectedPenalties).subscribe({
+        next: () => {
+          this.submitReschedule(data);
+        },
+        error: (error: any) => {
+          console.error('Error waiving penalties:', error);
+          // Continue with reschedule even if waive fails
+          this.submitReschedule(data);
+        }
+      });
+    } else {
+      this.submitReschedule(data);
     }
+  }
 
+  /** Submit the reschedule after penalties are waived */
+  private submitReschedule(data: any) {
     this.loanService.submitRescheduleData(data).subscribe((response: any) => {
       // TODO: needs to be updated
       // mentioned in Community App:
diff --git a/src/app/loans/loans-view/loan-account-actions/make-repayment/make-repayment.component.ts b/src/app/loans/loans-view/loan-account-actions/make-repayment/make-repayment.component.ts
index a2d7364ab..5367971ed 100644
--- a/src/app/loans/loans-view/loan-account-actions/make-repayment/make-repayment.component.ts
+++ b/src/app/loans/loans-view/loan-account-actions/make-repayment/make-repayment.component.ts
@@ -326,11 +326,25 @@ export class MakeRepaymentComponent implements OnInit {
     }
     delete data.skipInterestRefund;
 
-    // Add waived penalty charge IDs if penalties are being waived
+    // Waive penalties first if selected, then submit repayment
     if (this.waivePenalties && this.selectedPenalties.length > 0) {
-      data.chargeIds = this.selectedPenalties;
+      this.penaltyManagementService.waivePenalties(this.loanId, this.selectedPenalties).subscribe({
+        next: () => {
+          this.submitRepayment(data);
+        },
+        error: (error: any) => {
+          console.error('Error waiving penalties:', error);
+          // Continue with repayment even if waive fails
+          this.submitRepayment(data);
+        }
+      });
+    } else {
+      this.submitRepayment(data);
     }
+  }
 
+  /** Submit the repayment after penalties are waived */
+  private submitRepayment(data: any) {
     this.loanService.submitLoanActionButton(this.loanId, data, this.command).subscribe((response: any) => {
       this.router.navigate(['../../transactions'], { relativeTo: this.route });
     });
diff --git a/src/app/loans/services/penalty-management.service.ts b/src/app/loans/services/penalty-management.service.ts
index a0339935d..d20e2d6f6 100644
--- a/src/app/loans/services/penalty-management.service.ts
+++ b/src/app/loans/services/penalty-management.service.ts
@@ -1,6 +1,6 @@
 import { Injectable, inject } from '@angular/core';
-import { Observable } from 'rxjs';
-import { map } from 'rxjs/operators';
+import { Observable, forkJoin, of } from 'rxjs';
+import { map, catchError } from 'rxjs/operators';
 import { LoansService } from '../loans.service';
 import { Dates } from 'app/core/utils/dates';
 
@@ -187,4 +187,30 @@ export class PenaltyManagementService {
     // Fall back to the raw name (translate pipe will no-op if not a key)
     return rawName;
   }
+
+  /**
+   * Waive selected penalties for a loan
+   * Uses the existing executeLoansAccountChargesCommand API with 'waive' command
+   * @param loanId The loan ID
+   * @param penaltyIds Array of penalty/charge IDs to waive
+   * @returns Observable that completes when all penalties are waived
+   */
+  waivePenalties(loanId: string, penaltyIds: number[]): Observable<any[]> {
+    if (!penaltyIds || penaltyIds.length === 0) {
+      return of([]);
+    }
+
+    // Create waive requests for each penalty
+    const waiveRequests = penaltyIds.map((chargeId: number) =>
+      this.loanService.executeLoansAccountChargesCommand(loanId, 'waive', {}, chargeId).pipe(
+        catchError((error: any) => {
+          console.error(`Error waiving penalty ${chargeId}:`, error);
+          // Return null for failed waive operations so we can continue with others
+          return of(null);
+        })
+      )
+    );
+
+    return forkJoin(waiveRequests);
+  }
 }