Loan
A loan is an object that lives under an entity, at the same level as a bank account. Just like entities can have multiple bank accounts, entities can have multiple loans. Loans are the foundation for many lending-oriented use cases such as charge cards and term loans.
When a loan is created it starts with a principal_balance of 0. This property specifies the current outstanding balance amount on the loan which has not been paid back.
Disbursements
A disbursement is the movement of funds out of a loan. A disbursement is made between a loan object and a Column bank account object. When a disbursement is made, the principal_balance on the loan will increase, and the available_balance on the bank account will increase by the same amount. After a disbursement, the funds added to the bank account can be used just like any other funds.
Payments
A payment is the movement of funds into a loan. A payment is also made between a loan object and a Column bank account object. When a payment is made, the principal_balance on the loan will decrease, and the balance on the bank account will decrease by the same amount.
Loans can have multiple disbursements and payments, similar to how bank accounts have multiple transfers associated with them.
Note
The bank account specified in disbursements and payments must be a Column bank account. This allows Column to automatically handle tricky situations, such as returns and chargebacks. To get funds from a loan to an external bank account or to make a payment from an external bank account to the loan, funds must be first transferred to a Column bank acccount through ACH or Wire.