diff --git a/erpnext/loan_management/doctype/loan/loan.py b/erpnext/loan_management/doctype/loan/loan.py
index d55af70..0c9c97f 100644
--- a/erpnext/loan_management/doctype/loan/loan.py
+++ b/erpnext/loan_management/doctype/loan/loan.py
@@ -12,7 +12,6 @@
 	add_months,
 	date_diff,
 	flt,
-	get_first_day,
 	get_last_day,
 	getdate,
 	now_datetime,
@@ -117,36 +116,51 @@
 		if not self.repayment_start_date:
 			frappe.throw(_("Repayment Start Date is mandatory for term loans"))
 
-		schedule_type = frappe.db.get_value("Loan Type", self.loan_type, "repayment_schedule_type")
+		schedule_type_details = frappe.db.get_value(
+			"Loan Type", self.loan_type, ["repayment_schedule_type", "repayment_date_on"], as_dict=1
+		)
+
 		self.repayment_schedule = []
 		payment_date = self.repayment_start_date
 		balance_amount = self.loan_amount
 
 		while balance_amount > 0:
 			interest_amount, principal_amount, balance_amount, total_payment = self.get_amounts(
-				payment_date, balance_amount, schedule_type
+				payment_date,
+				balance_amount,
+				schedule_type_details.repayment_schedule_type,
+				schedule_type_details.repayment_date_on,
 			)
 
-			if schedule_type == "Pro-rated calendar months":
-				next_payment_date = add_days(get_last_day(payment_date), 1)
+			if schedule_type_details.repayment_schedule_type == "Pro-rated calendar months":
+				next_payment_date = get_last_day(payment_date)
+				if schedule_type_details.repayment_date_on == "Start of the next month":
+					next_payment_date = add_days(next_payment_date, 1)
+
 				payment_date = next_payment_date
 
 			self.add_repayment_schedule_row(
 				payment_date, principal_amount, interest_amount, total_payment, balance_amount
 			)
 
-			if schedule_type == "Monthly as per repayment start date":
+			if (
+				schedule_type_details.repayment_schedule_type == "Monthly as per repayment start date"
+				or schedule_type_details.repayment_date_on == "End of the current month"
+			):
 				next_payment_date = add_single_month(payment_date)
 				payment_date = next_payment_date
 
-	def get_amounts(self, payment_date, balance_amount, schedule_type):
-		first_day_of_month = get_first_day(payment_date)
-
+	def get_amounts(self, payment_date, balance_amount, schedule_type, repayment_date_on):
 		if schedule_type == "Monthly as per repayment start date":
 			days = 1
 			months = 12
 		else:
-			if first_day_of_month == payment_date:
+			expected_payment_date = get_last_day(payment_date)
+			if repayment_date_on == "Start of the next month":
+				expected_payment_date = add_days(expected_payment_date, 1)
+
+			if expected_payment_date == payment_date:
+				# using 30 days for calculating interest for all full months
 				days = 30
 				months = 365
 			else:
diff --git a/erpnext/loan_management/doctype/loan/test_loan.py b/erpnext/loan_management/doctype/loan/test_loan.py
index 2608e42..0e61161 100644
--- a/erpnext/loan_management/doctype/loan/test_loan.py
+++ b/erpnext/loan_management/doctype/loan/test_loan.py
@@ -4,7 +4,16 @@
 import unittest
 
 import frappe
-from frappe.utils import add_days, add_months, add_to_date, date_diff, flt, get_datetime, nowdate
+from frappe.utils import (
+	add_days,
+	add_months,
+	add_to_date,
+	date_diff,
+	flt,
+	format_date,
+	get_datetime,
+	nowdate,
+)
 
 from erpnext.loan_management.doctype.loan.loan import (
 	make_loan_write_off,
@@ -50,6 +59,50 @@
 		)
 
 		create_loan_type(
+			"Term Loan Type 1",
+			12000,
+			7.5,
+			is_term_loan=1,
+			mode_of_payment="Cash",
+			disbursement_account="Disbursement Account - _TC",
+			payment_account="Payment Account - _TC",
+			loan_account="Loan Account - _TC",
+			interest_income_account="Interest Income Account - _TC",
+			penalty_income_account="Penalty Income Account - _TC",
+			repayment_schedule_type="Monthly as per repayment start date",
+		)
+
+		create_loan_type(
+			"Term Loan Type 2",
+			12000,
+			7.5,
+			is_term_loan=1,
+			mode_of_payment="Cash",
+			disbursement_account="Disbursement Account - _TC",
+			payment_account="Payment Account - _TC",
+			loan_account="Loan Account - _TC",
+			interest_income_account="Interest Income Account - _TC",
+			penalty_income_account="Penalty Income Account - _TC",
+			repayment_schedule_type="Pro-rated calendar months",
+			repayment_date_on="Start of the next month",
+		)
+
+		create_loan_type(
+			"Term Loan Type 3",
+			12000,
+			7.5,
+			is_term_loan=1,
+			mode_of_payment="Cash",
+			disbursement_account="Disbursement Account - _TC",
+			payment_account="Payment Account - _TC",
+			loan_account="Loan Account - _TC",
+			interest_income_account="Interest Income Account - _TC",
+			penalty_income_account="Penalty Income Account - _TC",
+			repayment_schedule_type="Pro-rated calendar months",
+			repayment_date_on="End of the current month",
+		)
+
+		create_loan_type(
 			"Stock Loan",
 			2000000,
 			13.5,
@@ -902,6 +955,45 @@
 		amounts = calculate_amounts(loan.name, add_days(last_date, 5))
 		self.assertEqual(flt(amounts["pending_principal_amount"], 0), 0)
 
+	def test_term_loan_schedule_types(self):
+		loan = create_loan(
+			self.applicant1,
+			"Term Loan Type 1",
+			12000,
+			"Repay Over Number of Periods",
+			12,
+			repayment_start_date="2022-10-17",
+		)
+
+		# Check for first, second and last installment date
+		self.assertEqual(format_date(loan.get("repayment_schedule")[0].payment_date), "17-10-2022")
+		self.assertEqual(format_date(loan.get("repayment_schedule")[1].payment_date), "17-11-2022")
+		self.assertEqual(format_date(loan.get("repayment_schedule")[-1].payment_date), "17-09-2023")
+
+		loan.loan_type = "Term Loan Type 2"
+		loan.save()
+
+		# Check for first, second and last installment date
+		self.assertEqual(format_date(loan.get("repayment_schedule")[0].payment_date), "01-11-2022")
+		self.assertEqual(format_date(loan.get("repayment_schedule")[1].payment_date), "01-12-2022")
+		self.assertEqual(format_date(loan.get("repayment_schedule")[-1].payment_date), "01-10-2023")
+
+		loan.loan_type = "Term Loan Type 3"
+		loan.save()
+
+		# Check for first, second and last installment date
+		self.assertEqual(format_date(loan.get("repayment_schedule")[0].payment_date), "31-10-2022")
+		self.assertEqual(format_date(loan.get("repayment_schedule")[1].payment_date), "30-11-2022")
+		self.assertEqual(format_date(loan.get("repayment_schedule")[-1].payment_date), "30-09-2023")
+
+		loan.repayment_method = "Repay Fixed Amount per Period"
+		loan.monthly_repayment_amount = 1042
+		loan.save()
+
+		self.assertEqual(format_date(loan.get("repayment_schedule")[0].payment_date), "31-10-2022")
+		self.assertEqual(format_date(loan.get("repayment_schedule")[1].payment_date), "30-11-2022")
+		self.assertEqual(format_date(loan.get("repayment_schedule")[-1].payment_date), "30-09-2023")
+
 
 def create_loan_scenario_for_penalty(doc):
 	pledge = [{"loan_security": "Test Security 1", "qty": 4000.00}]
@@ -1033,6 +1125,8 @@
 	penalty_income_account=None,
 	repayment_method=None,
 	repayment_periods=None,
+	repayment_schedule_type=None,
+	repayment_date_on=None,
 ):
 
 	if not frappe.db.exists("Loan Type", loan_name):
@@ -1057,8 +1151,14 @@
 				"repayment_periods": repayment_periods,
 				"write_off_amount": 100,
 			}
-		).insert()
+		)
 
+		if loan_type.is_term_loan:
+			loan_type.repayment_schedule_type = repayment_schedule_type
+			if loan_type.repayment_schedule_type != "Monthly as per repayment start date":
+				loan_type.repayment_date_on = repayment_date_on
+
+		loan_type.insert()
 		loan_type.submit()
 
 
diff --git a/erpnext/loan_management/doctype/loan_type/loan_type.json b/erpnext/loan_management/doctype/loan_type/loan_type.json
index e1ed3ca..5cc9464 100644
--- a/erpnext/loan_management/doctype/loan_type/loan_type.json
+++ b/erpnext/loan_management/doctype/loan_type/loan_type.json
@@ -17,6 +17,7 @@
   "is_term_loan",
   "disabled",
   "repayment_schedule_type",
+  "repayment_date_on",
   "description",
   "account_details_section",
   "mode_of_payment",
@@ -161,17 +162,27 @@
   },
   {
    "depends_on": "is_term_loan",
+   "description": "The schedule type that will be used for generating the term loan schedules (will affect the payment date and monthly repayment amount)",
    "fieldname": "repayment_schedule_type",
    "fieldtype": "Select",
    "label": "Repayment Schedule Type",
    "mandatory_depends_on": "is_term_loan",
    "options": "\nMonthly as per repayment start date\nPro-rated calendar months"
+  },
+  {
+   "depends_on": "eval:doc.repayment_schedule_type == \"Pro-rated calendar months\"",
+   "description": "Select whether the repayment date should be the end of the current month or start of the upcoming month",
+   "fieldname": "repayment_date_on",
+   "fieldtype": "Select",
+   "label": "Repayment Date On",
+   "mandatory_depends_on": "eval:doc.repayment_schedule_type == \"Pro-rated calendar months\"",
+   "options": "\nStart of the next month\nEnd of the current month"
   }
  ],
  "index_web_pages_for_search": 1,
  "is_submittable": 1,
  "links": [],
- "modified": "2022-09-28 21:31:01.278941",
+ "modified": "2022-10-22 17:43:03.954201",
  "modified_by": "Administrator",
  "module": "Loan Management",
  "name": "Loan Type",