diff --git a/erpnext/loan_management/doctype/loan/test_loan.py b/erpnext/loan_management/doctype/loan/test_loan.py
index b232b87..1676c21 100644
--- a/erpnext/loan_management/doctype/loan/test_loan.py
+++ b/erpnext/loan_management/doctype/loan/test_loan.py
@@ -218,6 +218,14 @@
 		self.assertEqual(flt(loan.total_principal_paid, 0), flt(repayment_entry.amount_paid -
 			 penalty_amount - total_interest_paid, 0))
 
+		# Check Repayment Entry cancel
+		repayment_entry.load_from_db()
+		repayment_entry.cancel()
+
+		loan.load_from_db()
+		self.assertEqual(loan.total_principal_paid, 0)
+		self.assertEqual(loan.total_principal_paid, 0)
+
 	def test_loan_closure(self):
 		pledge = [{
 			"loan_security": "Test Security 1",
diff --git a/erpnext/loan_management/doctype/loan_repayment/loan_repayment.py b/erpnext/loan_management/doctype/loan_repayment/loan_repayment.py
index f7d9e66..2abb395 100644
--- a/erpnext/loan_management/doctype/loan_repayment/loan_repayment.py
+++ b/erpnext/loan_management/doctype/loan_repayment/loan_repayment.py
@@ -134,7 +134,7 @@
 		})
 
 		pending_principal_amount = get_pending_principal_amount(loan)
-		if not loan.is_secured_loan and pending_principal_amount < 0:
+		if not loan.is_secured_loan and pending_principal_amount <= 0:
 			loan.update({'status': 'Loan Closure Requested'})
 
 		for payment in self.repayment_details: