How to mark a loan as forgiven

Sometimes the right financial lesson isn’t about repayment — it’s about grace. Whether your child has been working hard toward a goal, hit an unexpected setback, or you simply want to clear the slate, KiddyCash lets you forgive the remaining balance on any active loan. This closes the loan cleanly without requiring full repayment, and records the forgiven amount so the history stays accurate.

This is different from editing a loan. If you want to adjust the amount, due date, or interest rate on an ongoing loan, see how to edit a child loan instead. Forgiveness is a one-way action — it cancels what’s owed and marks the loan as resolved.

Before you begin

Make sure the loan is still active. Loans that are already fully repaid or previously cancelled cannot be forgiven. You’ll also want to consider whether any accrued interest should factor into the conversation with your child before you proceed — forgiveness wipes the principal and any outstanding interest. If you’ve been using interest as a teaching tool, it’s worth having that discussion first. You can read more about how that works in how loan interest works as a lesson.

Steps to forgive a loan

  1. Open the loan detail page. Navigate directly to the loan using a URL in the format https://kiddy.cash/family/loans/{loanId}, replacing {loanId} with the actual loan ID. You can also reach it from your Family dashboard by tapping Loans, then selecting the specific loan from your child’s profile.

  2. Review the remaining balance. The loan detail page shows the original amount, total repaid so far, outstanding principal, and any accrued interest. In Kenya, this might be a loan of KES 2,000 your child took to stock a small business selling snacks at school — with KES 800 still remaining. Confirm you’re looking at the right loan before proceeding.

  3. Tap the options menu. In the top-right corner of the loan detail page, tap the three-dot menu (⋮) or the Manage button, depending on your device.

  4. Select “Forgive loan.” This option appears alongside others like Edit and Send Reminder. Tap it to open the forgiveness flow.

  5. Add a forgiveness note (optional but recommended). You’ll be prompted to write a short note explaining the reason. This note is visible to your child in their wallet history. Something like “You worked hard this term — this one’s on me” makes the moment meaningful and reinforces the lesson behind the decision.

  6. Confirm the action. A summary screen will show the exact amount being forgiven, including any outstanding interest. Tap Confirm forgiveness to complete the action.

  7. Check the updated loan status. The loan will now appear as Forgiven in your loan history. Your child’s wallet balance is unaffected — no funds are transferred. The forgiven amount is simply recorded and removed from the outstanding balance tracker.

What happens after forgiveness

  • The loan disappears from your child’s active obligations in their KiddyCash wallet.
  • The forgiven amount appears as a closed entry in your Family loan history with a Forgiven badge.
  • If your child had repaid part of the loan via M-Pesa or their KiddyCash wallet, those payments remain recorded as completed transactions.
  • No badge is automatically awarded for loan forgiveness, but you can manually award a badge from the Family dashboard to mark the moment.

A note on using forgiveness intentionally

Forgiving a loan too quickly can dilute the lesson. Used well, it can reinforce generosity, resilience, and trust. Used carelessly, it can signal that commitments are optional. Think of it as a parenting tool, not just an admin action.