Loan Accounts

Loan accounts are Accounts funded by a credit facility rather than deposits.

Most Accounts on Increase are funded by deposits — money that has been transferred into the account from an external source. Loan accounts work differently. Instead of holding deposited funds, a loan account is backed by a credit facility extended by the bank. This is useful for programs like credit cards, lines of credit, or other lending products where the bank extends credit to an end user.

A loan account uses the same Account object as a deposit account, with the funding field set to loan. Before opening a loan account, you’ll need to work with the bank to set up a loan program — contact support@increase.com to get started.

Program setup

Before creating loan accounts, your Program must be configured for lending. This configuration is managed by the bank and includes:

• Maximum extendable credit — The total credit the bank is willing to extend across all loan accounts in the Program. Individual account credit limits must fit within this program-level cap.
• Interest rates — Loan accounts accrue interest on outstanding balances.

Contact support@increase.com to set up a lending program.

How loan accounts work

When an Account is created with funding set to loan, an associated Loan object is created that tracks the terms of the credit facility. The Loan defines:

• Credit limit — The maximum amount the borrower can draw against. The credit limit can be adjusted over time through credit limit changes.
• Statement payment type — Determines what the borrower owes each statement period. There are two options:
  • Balance — The borrower must pay the full balance of the loan at the end of the statement period.
  • Interest until maturity — The borrower must pay only the accrued interest at the end of the statement period, with the principal due at maturity.
• Statement cadence — How frequently statements are generated. Statements are generated monthly on a configured day of the month.
• Grace period — The number of days after a statement is generated before the payment is due.
• Maturity date — The date on which the loan must be repaid in full, if applicable.

Transactions on a loan account work the same way as on a deposit account — each transaction creates a ledger entry that adjusts the account balance. The difference is that the balance on a loan account typically represents an amount owed to the bank rather than funds on deposit.

Statements

Loan accounts generate Account Statements on a monthly cadence. Each statement includes loan-specific details:

• Due balance — The amount the borrower owes for the statement period.
• Due date — The date by which the payment must be made, calculated from the statement date plus the grace period.
• Past due balance — Any balance from prior statement periods that has not yet been paid.

When a credit is applied to the account (such as a payment), it is recorded against the outstanding payable balance.

Example: Charge cards

A charge card requires the borrower to pay the full outstanding balance at the end of each statement period. This is configured by setting statement_payment_type to balance. Charge cards are useful for expense management and corporate card programs where the balance should not revolve.

curl https://api.increase.com/accounts \
  -H "Authorization: Bearer ${INCREASE_API_KEY}" \
  -H "Content-Type: application/json" \
  -d $'{
    "name": "Corporate Charge Card",
    "entity_id": "entity_n8y8tnk2p9339ti393yi",
    "program_id": "program_i2v2os4mwza1oetokh9i",
    "funding": "loan",
    "loan": {
      "credit_limit": 500000,
      "statement_payment_type": "balance",
      "statement_day_of_month": 15,
      "grace_period_days": 25
    }
  }'

After the cardholder spends during the statement period, the monthly Account Statement reflects the full balance owed. In this example, $2,347.50 in purchases were made against the $5,000 credit limit. Because the statement payment type is balance, the entire amount is due:

{
  "type": "account_statement",
  "id": "account_statement_o91bozrv0vbvjmlan6dj",
  "account_id": "account_in71c4amph0vgo2qllky",
  "statement_period_start": "2026-02-15T00:00:00Z",
  "statement_period_end": "2026-03-14T23:59:59Z",
  "starting_balance": 0,
  "ending_balance": -234750,
  "loan": {
    "due_balance": 234750,
    "past_due_balance": 0,
    "due_at": "2026-04-09T00:00:00Z"
  }
}

The due_balance of 234750 (i.e., $2,347.50) equals the full ending balance. The due_at date is 25 days after the statement date, matching the configured grace period.

Example: Lines of credit

A line of credit requires the borrower to pay only the accrued interest at the end of each statement period, with the principal balance due at maturity. This is configured by setting statement_payment_type to interest_until_maturity and providing a maturity_date.

curl https://api.increase.com/accounts \
  -H "Authorization: Bearer ${INCREASE_API_KEY}" \
  -H "Content-Type: application/json" \
  -d $'{
    "name": "Business Line of Credit",
    "entity_id": "entity_n8y8tnk2p9339ti393yi",
    "program_id": "program_i2v2os4mwza1oetokh9i",
    "funding": "loan",
    "loan": {
      "credit_limit": 10000000,
      "statement_payment_type": "interest_until_maturity",
      "statement_day_of_month": 1,
      "grace_period_days": 15,
      "maturity_date": "2027-06-01"
    }
  }'

For a line of credit, the monthly statement only requires payment of accrued interest. In this example, the borrower has drawn $75,000 of their $100,000 credit limit. At an 8.5% annual interest rate, the monthly interest due is $531.25:

{
  "type": "account_statement",
  "id": "account_statement_p82caqsw1wcwknmbo7ek",
  "account_id": "account_jo82h6wq4p8vcm3rkztb",
  "statement_period_start": "2026-03-01T00:00:00Z",
  "statement_period_end": "2026-03-31T23:59:59Z",
  "starting_balance": -7500000,
  "ending_balance": -7500000,
  "loan": {
    "due_balance": 53125,
    "past_due_balance": 0,
    "due_at": "2026-04-16T00:00:00Z"
  }
}

The ending_balance of -7500000 (i.e., -$75,000) reflects the outstanding principal, but the due_balance is only 53125 (i.e., $531.25) — the accrued interest for the period. The principal remains outstanding until the maturity_date.

When the maturity date is reached, a final statement is issued with the full outstanding principal as the due_balance. In this example, that statement would show a due_balance of 7500000 (i.e., $75,000).