diff --git a/erpnext/loan_management/doctype/loan_repayment/loan_repayment.py b/erpnext/loan_management/doctype/loan_repayment/loan_repayment.py
index 253518009200..910343d934d3 100644
--- a/erpnext/loan_management/doctype/loan_repayment/loan_repayment.py
+++ b/erpnext/loan_management/doctype/loan_repayment/loan_repayment.py
@@ -278,9 +278,9 @@ def allocate_amounts(self, repayment_details):
 
 		if interest_paid > 0:
 			if self.penalty_amount and interest_paid > self.penalty_amount:
-				self.total_penalty_paid = self.penalty_amount
+				self.total_penalty_paid = flt(self.penalty_amount, self.precision("debit"))
 			elif self.penalty_amount:
-				self.total_penalty_paid = interest_paid
+				self.total_penalty_paid = flt(interest_paid, self.precision("debit"))
 
 			interest_paid -= self.total_penalty_paid