diff --git a/erpnext/loan_management/doctype/loan/loan.py b/erpnext/loan_management/doctype/loan/loan.py
index 2e0a4d13ab2..e607d4f3cbf 100644
--- a/erpnext/loan_management/doctype/loan/loan.py
+++ b/erpnext/loan_management/doctype/loan/loan.py
@@ -202,7 +202,9 @@ def request_loan_closure(loan, posting_date=None):
 
 	# checking greater than 0 as there may be some minor precision error
 	if pending_amount < write_off_limit:
-		# update status as loan closure requested
+		# Auto create loan write off and update status as loan closure requested
+		write_off = make_loan_write_off(loan)
+		write_off.submit()
 		frappe.db.set_value('Loan', loan, 'status', 'Loan Closure Requested')
 	else:
 		frappe.throw(_("Cannot close loan as there is an outstanding of {0}").format(pending_amount))
@@ -336,13 +338,13 @@ def create_loan_security_unpledge(unpledge_map, loan, company, applicant_type, a
 	return unpledge_request
 
 def validate_employee_currency_with_company_currency(applicant, company):
-		from erpnext.payroll.doctype.salary_structure_assignment.salary_structure_assignment import get_employee_currency
-		if not applicant:
-			frappe.throw(_("Please select Applicant"))
-		if not company:
-			frappe.throw(_("Please select Company"))
-		employee_currency = get_employee_currency(applicant)
-		company_currency = erpnext.get_company_currency(company)
-		if employee_currency != company_currency:
-			frappe.throw(_("Loan cannot be repayed from salary for Employee {0} because salary is processed in currency {1}")
-				.format(applicant, employee_currency))
+	from erpnext.payroll.doctype.salary_structure_assignment.salary_structure_assignment import get_employee_currency
+	if not applicant:
+		frappe.throw(_("Please select Applicant"))
+	if not company:
+		frappe.throw(_("Please select Company"))
+	employee_currency = get_employee_currency(applicant)
+	company_currency = erpnext.get_company_currency(company)
+	if employee_currency != company_currency:
+		frappe.throw(_("Loan cannot be repayed from salary for Employee {0} because salary is processed in currency {1}")
+			.format(applicant, employee_currency))
diff --git a/erpnext/loan_management/doctype/loan_type/loan_type.json b/erpnext/loan_management/doctype/loan_type/loan_type.json
index 18a97315f0a..3ef53044c20 100644
--- a/erpnext/loan_management/doctype/loan_type/loan_type.json
+++ b/erpnext/loan_management/doctype/loan_type/loan_type.json
@@ -144,17 +144,17 @@
   },
   {
    "allow_on_submit": 1,
-   "description": "Pending amount that will be automatically ignored on loan closure request ",
+   "description": "Loan Write Off will be automatically created on loan closure request if pending amount is below this limit",
    "fieldname": "write_off_amount",
    "fieldtype": "Currency",
-   "label": "Write Off Amount ",
+   "label": "Auto Write Off Amount ",
    "options": "Company:company:default_currency"
   }
  ],
  "index_web_pages_for_search": 1,
  "is_submittable": 1,
  "links": [],
- "modified": "2020-10-26 07:13:55.029811",
+ "modified": "2021-01-17 06:51:26.082879",
  "modified_by": "Administrator",
  "module": "Loan Management",
  "name": "Loan Type",