diff --git a/erpnext/hr/doctype/loan_application/loan_application.py b/erpnext/hr/doctype/loan_application/loan_application.py
index 5dbcf15eac1..67be9f2a1ca 100644
--- a/erpnext/hr/doctype/loan_application/loan_application.py
+++ b/erpnext/hr/doctype/loan_application/loan_application.py
@@ -29,9 +29,12 @@ class LoanApplication(Document):
 		if self.repayment_method == "Repay Fixed Amount per Period":
 			monthly_interest_rate = flt(self.rate_of_interest) / (12 *100)
 			if monthly_interest_rate:
-				self.repayment_periods = math.ceil((math.log(self.repayment_amount) -
-					math.log(self.repayment_amount - (self.loan_amount*monthly_interest_rate))) /
-					(math.log(1 + monthly_interest_rate)))
+				min_repayment_amount = self.loan_amount*monthly_interest_rate
+				if self.repayment_amount - min_repayment_amount < 0:
+					frappe.throw(_("Repayment Amount must be greater than " \
+						+ str(flt(min_repayment_amount, 2))))
+				self.repayment_periods = math.ceil(math.log(self.repayment_amount) -
+					math.log(self.repayment_amount - min_repayment_amount) /(math.log(1 + monthly_interest_rate)))
 			else:
 				self.repayment_periods = self.loan_amount / self.repayment_amount
 
diff --git a/erpnext/hr/doctype/loan_application/test_loan_application.py b/erpnext/hr/doctype/loan_application/test_loan_application.py
index 7644dd0c9f2..b08b5225030 100644
--- a/erpnext/hr/doctype/loan_application/test_loan_application.py
+++ b/erpnext/hr/doctype/loan_application/test_loan_application.py
@@ -31,21 +31,22 @@ class TestLoanApplication(unittest.TestCase):
 				"rate_of_interest": 9.2,
 				"loan_amount": 250000,
 				"repayment_method": "Repay Over Number of Periods",
-				"repayment_periods": 24
+				"repayment_periods": 18
 			})
 			loan_application.insert()
-	
+
 
 	def test_loan_totals(self):
 		loan_application = frappe.get_doc("Loan Application", {"applicant":self.applicant})
-		self.assertEquals(loan_application.repayment_amount, 11445)
-		self.assertEquals(loan_application.total_payable_interest, 24657)
-		self.assertEquals(loan_application.total_payable_amount, 274657)
 
-		loan_application.repayment_method = "Repay Fixed Amount per Period"
-		loan_application.repayment_amount = 15000
+		self.assertEqual(loan_application.total_payable_interest, 18599)
+		self.assertEqual(loan_application.total_payable_amount, 268599)
+		self.assertEqual(loan_application.repayment_amount, 14923)
+
+		loan_application.repayment_periods = 24
 		loan_application.save()
+		loan_application.reload()
 
-		self.assertEqual(loan_application.repayment_periods, 18)
-		self.assertEqual(loan_application.total_payable_interest, 18506)
-		self.assertEqual(loan_application.total_payable_amount, 268506)
\ No newline at end of file
+		self.assertEqual(loan_application.total_payable_interest, 24657)
+		self.assertEqual(loan_application.total_payable_amount, 274657)
+		self.assertEqual(loan_application.repayment_amount, 11445)