XRP Ledger proposal targets loan repayment rounding errors

The November 6 GitHub proposal changes how the ledger calculates the amount still owed after each repayment. Its “telescoping” method would use the remaining payment schedule to recalculate the outstanding balance, rather than letting separate installment calculations build up rounding differences. For on-time LoanPay transactions, TotalValueOutstanding would be brought in line with the schedule for one fewer payment, subject to a cap at the rounded PeriodicPayment.

The proposed code updates both LoanSet, which establishes loan terms, and LoanPay, which processes repayments. One commit moves scheduled-value calculations into a separate function, scheduledValue, without changing existing behavior. Another applies the correction under LendingProtocolV1_2 and resets the balance after accepted overpayments. The proposal also includes safeguards against negative unpaid interest and separate handling for zero-interest loans, whose total value and principal use different rounding rules. Tests cover Legacy, CashBasis and FixedPrecision vaults, with and without the amendment enabled.

The fix would not erase rounding differences already attached to every outstanding loan. According to the proposal, older loans that carry one unit more than their scheduled balance could retain it until a borrower makes an overpayment. Some may still require a final payment equal to the rounded PeriodicPayment plus one unit. Small overpayments within existing rounding limits may be ignored, even when the transaction returns a successful result.

LendingProtocolV1_2 is part of the planned native lending framework, which would use Single Asset Vaults to fund fixed-term loans, while brokers assess borrowers and manage credit risk off-chain. The amendment must win support from more than 80% of trusted validators for two consecutive weeks to activate. Pull request #8698 remains open; no mainnet activation date has been announced.