diff --git a/pallets/loans/src/entities/loans.rs b/pallets/loans/src/entities/loans.rs
index a0cc2322ca..2deabecc8a 100644
--- a/pallets/loans/src/entities/loans.rs
+++ b/pallets/loans/src/entities/loans.rs
@@ -370,7 +370,7 @@ impl<T: Config> ActiveLoan<T> {
 
 		ensure!(
 			self.total_repaid.effective()? >= expected_payment,
-			DispatchError::Other("payment overdue")
+			Error::<T>::from(BorrowLoanError::PaymentOverdue)
 		);
 
 		Ok(())
diff --git a/pallets/loans/src/tests/borrow_loan.rs b/pallets/loans/src/tests/borrow_loan.rs
index 90645656ee..fcaa8d7a16 100644
--- a/pallets/loans/src/tests/borrow_loan.rs
+++ b/pallets/loans/src/tests/borrow_loan.rs
@@ -734,7 +734,7 @@ mod cashflow {
 					loan_id,
 					PrincipalInput::Internal(COLLATERAL_VALUE / 4)
 				),
-				DispatchError::Other("payment overdue")
+				Error::<Runtime>::from(BorrowLoanError::PaymentOverdue)
 			);
 		});
 	}
diff --git a/pallets/loans/src/types/mod.rs b/pallets/loans/src/types/mod.rs
index ee9def50ed..2d279fb9e9 100644
--- a/pallets/loans/src/types/mod.rs
+++ b/pallets/loans/src/types/mod.rs
@@ -44,6 +44,8 @@ pub enum BorrowLoanError {
 	Restriction,
 	/// Emits when maturity has passed and borrower tried to borrow more
 	MaturityDatePassed,
+	/// Emits when the cashflow payment is overdue
+	PaymentOverdue,
 }
 
 /// Error related to loan borrowing