diff --git a/fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/rescheduleloan/data/LoanRescheduleRequestDataValidatorImpl.java b/fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/rescheduleloan/data/LoanRescheduleRequestDataValidatorImpl.java
index bb6c02a389a..d7bffb0b8de 100644
--- a/fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/rescheduleloan/data/LoanRescheduleRequestDataValidatorImpl.java
+++ b/fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/rescheduleloan/data/LoanRescheduleRequestDataValidatorImpl.java
@@ -200,13 +200,13 @@ public static void validateSupportedParameters(JsonCommand jsonCommand, Set<Stri
     }
 
     public static void validateReschedulingInstallment(DataValidatorBuilder dataValidatorBuilder,
-            LoanRepaymentScheduleInstallment installment) {
+            LoanRepaymentScheduleInstallment installment, LoanScheduleType loanScheduleType) {
         if (installment == null) {
             dataValidatorBuilder.reset().parameter(RescheduleLoansApiConstants.rescheduleFromDateParamName)
                     .failWithCode("repayment.schedule.installment.does.not.exist", "Repayment schedule installment does not exist");
         }
 
-        if (installment != null && installment.isObligationsMet()) {
+        if (installment != null && installment.isObligationsMet() && !LoanScheduleType.PROGRESSIVE.equals(loanScheduleType)) {
             dataValidatorBuilder.reset().parameter(RescheduleLoansApiConstants.rescheduleFromDateParamName)
                     .failWithCode("repayment.schedule.installment.obligation.met", "Repayment schedule installment obligation met");
         }
@@ -258,7 +258,8 @@ public void validateForCreateAction(final JsonCommand jsonCommand, final Loan lo
             validateMultiDisburseLoan(loan, dataValidatorBuilder);
 
             LoanRepaymentScheduleInstallment installment = loan.fetchLoanRepaymentScheduleInstallmentByDueDate(rescheduleFromDate);
-            validateReschedulingInstallment(dataValidatorBuilder, installment);
+            LoanScheduleType loanScheduleType = LoanScheduleType.valueOf(loan.getLoanProductRelatedDetail().getLoanScheduleType().name());
+            validateReschedulingInstallment(dataValidatorBuilder, installment, loanScheduleType);
             validateForOverdueCharges(dataValidatorBuilder, loan, installment);
 
             if (!dataValidationErrors.isEmpty()) {
@@ -308,8 +309,9 @@ public void validateForApproveAction(final JsonCommand jsonCommand, LoanReschedu
 
             validateLoanIsActive(loan, dataValidatorBuilder);
             installment = loan.fetchLoanRepaymentScheduleInstallmentByDueDate(rescheduleFromDate);
+            LoanScheduleType loanScheduleType = LoanScheduleType.valueOf(loan.getLoanProductRelatedDetail().getLoanScheduleType().name());
 
-            validateReschedulingInstallment(dataValidatorBuilder, installment);
+            validateReschedulingInstallment(dataValidatorBuilder, installment, loanScheduleType);
             validateForOverdueCharges(dataValidatorBuilder, loan, installment);
 
             if (!dataValidationErrors.isEmpty()) {
diff --git a/fineract-loan/src/test/java/org/apache/fineract/portfolio/loanaccount/rescheduleloan/data/LoanRescheduleRequestDataValidatorImplTest.java b/fineract-loan/src/test/java/org/apache/fineract/portfolio/loanaccount/rescheduleloan/data/LoanRescheduleRequestDataValidatorImplTest.java
new file mode 100644
index 00000000000..3eb5fc97d13
--- /dev/null
+++ b/fineract-loan/src/test/java/org/apache/fineract/portfolio/loanaccount/rescheduleloan/data/LoanRescheduleRequestDataValidatorImplTest.java
@@ -0,0 +1,92 @@
+/**
+ * Licensed to the Apache Software Foundation (ASF) under one
+ * or more contributor license agreements. See the NOTICE file
+ * distributed with this work for additional information
+ * regarding copyright ownership. The ASF licenses this file
+ * to you under the Apache License, Version 2.0 (the
+ * "License"); you may not use this file except in compliance
+ * with the License. You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing,
+ * software distributed under the License is distributed on an
+ * "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+ * KIND, either express or implied. See the License for the
+ * specific language governing permissions and limitations
+ * under the License.
+ */
+package org.apache.fineract.portfolio.loanaccount.rescheduleloan.data;
+
+import static org.junit.jupiter.api.Assertions.assertDoesNotThrow;
+import static org.mockito.ArgumentMatchers.anyString;
+import static org.mockito.Mockito.never;
+import static org.mockito.Mockito.verify;
+import static org.mockito.Mockito.when;
+
+import org.apache.fineract.infrastructure.core.data.DataValidatorBuilder;
+import org.apache.fineract.portfolio.loanaccount.domain.LoanRepaymentScheduleInstallment;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleType;
+import org.apache.fineract.portfolio.loanaccount.rescheduleloan.RescheduleLoansApiConstants;
+import org.junit.jupiter.api.BeforeEach;
+import org.junit.jupiter.api.Test;
+import org.junit.jupiter.api.extension.ExtendWith;
+import org.mockito.Mock;
+import org.mockito.junit.jupiter.MockitoExtension;
+import org.mockito.junit.jupiter.MockitoSettings;
+import org.mockito.quality.Strictness;
+
+@ExtendWith(MockitoExtension.class)
+@MockitoSettings(strictness = Strictness.LENIENT)
+class LoanRescheduleRequestDataValidatorImplTest {
+
+    @Mock
+    private DataValidatorBuilder dataValidatorBuilder;
+    @Mock
+    private LoanRepaymentScheduleInstallment installment;
+
+    @BeforeEach
+    void setUp() {
+        when(dataValidatorBuilder.reset()).thenReturn(dataValidatorBuilder);
+        when(dataValidatorBuilder.parameter(anyString())).thenReturn(dataValidatorBuilder);
+    }
+
+    @Test
+    void shouldFailWhenInstallmentIsNull() {
+        LoanRescheduleRequestDataValidatorImpl.validateReschedulingInstallment(dataValidatorBuilder, null, LoanScheduleType.PROGRESSIVE);
+
+        verify(dataValidatorBuilder).reset();
+        verify(dataValidatorBuilder).parameter(RescheduleLoansApiConstants.rescheduleFromDateParamName);
+        verify(dataValidatorBuilder).failWithCode("repayment.schedule.installment.does.not.exist",
+                "Repayment schedule installment does not exist");
+    }
+
+    @Test
+    void shouldFailWhenObligationsMetAndLoanScheduleTypeIsNotProgressive() {
+        when(installment.isObligationsMet()).thenReturn(true);
+
+        LoanRescheduleRequestDataValidatorImpl.validateReschedulingInstallment(dataValidatorBuilder, installment, LoanScheduleType.CUMULATIVE);
+
+        verify(dataValidatorBuilder).reset();
+        verify(dataValidatorBuilder).parameter(RescheduleLoansApiConstants.rescheduleFromDateParamName);
+        verify(dataValidatorBuilder).failWithCode("repayment.schedule.installment.obligation.met", "Repayment schedule installment obligation met");
+    }
+
+    @Test
+    void shouldNotFailWhenObligationsMetAndLoanScheduleTypeIsProgressive() {
+        when(installment.isObligationsMet()).thenReturn(true);
+
+        assertDoesNotThrow(() -> LoanRescheduleRequestDataValidatorImpl.validateReschedulingInstallment(dataValidatorBuilder, installment, LoanScheduleType.PROGRESSIVE));
+
+        verify(dataValidatorBuilder, never()).failWithCode(anyString(), anyString());
+    }
+
+    @Test
+    void shouldNotFailWhenObligationsNotMet() {
+        when(installment.isObligationsMet()).thenReturn(false);
+
+        assertDoesNotThrow(() -> LoanRescheduleRequestDataValidatorImpl.validateReschedulingInstallment(dataValidatorBuilder, installment, LoanScheduleType.CUMULATIVE));
+
+        verify(dataValidatorBuilder, never()).failWithCode(anyString(), anyString());
+    }
+}
diff --git a/fineract-progressive-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/rescheduleloan/data/ProgressiveLoanRescheduleRequestDataValidator.java b/fineract-progressive-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/rescheduleloan/data/ProgressiveLoanRescheduleRequestDataValidator.java
index 872e8b7bfb0..72bcd2e2b39 100644
--- a/fineract-progressive-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/rescheduleloan/data/ProgressiveLoanRescheduleRequestDataValidator.java
+++ b/fineract-progressive-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/rescheduleloan/data/ProgressiveLoanRescheduleRequestDataValidator.java
@@ -51,6 +51,7 @@
 import org.apache.fineract.portfolio.loanaccount.domain.Loan;
 import org.apache.fineract.portfolio.loanaccount.domain.LoanRepaymentScheduleInstallment;
 import org.apache.fineract.portfolio.loanaccount.domain.LoanStatus;
+import org.apache.fineract.portfolio.loanaccount.loanschedule.domain.LoanScheduleType;
 import org.apache.fineract.portfolio.loanaccount.rescheduleloan.RescheduleLoansApiConstants;
 import org.apache.fineract.portfolio.loanaccount.rescheduleloan.domain.LoanRescheduleRequest;
 import org.apache.fineract.portfolio.loanaccount.rescheduleloan.domain.LoanRescheduleRequestRepository;
@@ -112,7 +113,8 @@ public void validateForCreateAction(JsonCommand jsonCommand, Loan loan) {
             installment = loan.fetchLoanRepaymentScheduleInstallmentByDueDate(rescheduleFromDate);
         }
 
-        validateReschedulingInstallment(dataValidatorBuilder, installment);
+        LoanScheduleType loanScheduleType = LoanScheduleType.valueOf(loan.getLoanProductRelatedDetail().getLoanScheduleType().name());
+        validateReschedulingInstallment(dataValidatorBuilder, installment, loanScheduleType);
         validateForOverdueCharges(dataValidatorBuilder, loan, installment);
 
         if (!dataValidationErrors.isEmpty()) {
@@ -163,7 +165,8 @@ public void validateForApproveAction(JsonCommand jsonCommand, LoanRescheduleRequ
         } else {
             installment = loan.fetchLoanRepaymentScheduleInstallmentByDueDate(rescheduleFromDate);
         }
-        validateReschedulingInstallment(dataValidatorBuilder, installment);
+        LoanScheduleType loanScheduleType = LoanScheduleType.valueOf(loan.getLoanProductRelatedDetail().getLoanScheduleType().name());
+        validateReschedulingInstallment(dataValidatorBuilder, installment, loanScheduleType);
         validateForOverdueCharges(dataValidatorBuilder, loan, installment);
 
         if (!dataValidationErrors.isEmpty()) {
diff --git a/integration-tests/src/test/java/org/apache/fineract/integrationtests/BaseLoanIntegrationTest.java b/integration-tests/src/test/java/org/apache/fineract/integrationtests/BaseLoanIntegrationTest.java
index 54159aefd54..bee30bc8c63 100644
--- a/integration-tests/src/test/java/org/apache/fineract/integrationtests/BaseLoanIntegrationTest.java
+++ b/integration-tests/src/test/java/org/apache/fineract/integrationtests/BaseLoanIntegrationTest.java
@@ -23,6 +23,7 @@
 import static org.apache.fineract.integrationtests.BaseLoanIntegrationTest.TransactionProcessingStrategyCode.ADVANCED_PAYMENT_ALLOCATION_STRATEGY;
 import static org.apache.fineract.integrationtests.common.loans.LoanApplicationTestBuilder.DUE_PENALTY_INTEREST_PRINCIPAL_FEE_IN_ADVANCE_PENALTY_INTEREST_PRINCIPAL_FEE_STRATEGY;
 import static org.junit.jupiter.api.Assertions.assertEquals;
+import static org.junit.jupiter.api.Assertions.assertNotEquals;
 import static org.junit.jupiter.api.Assertions.assertNotNull;
 import static org.junit.jupiter.api.Assertions.assertNull;
 import static org.junit.jupiter.api.Assertions.assertThrows;
@@ -714,6 +715,35 @@ protected Long createDisbursementPercentageCharge(double percentageAmount) {
         return chargeId.longValue();
     }
 
+    protected void verifyRepaymentSchedule(GetLoansLoanIdResponse savedLoanResponse, GetLoansLoanIdResponse actualLoanResponse,
+            int totalPeriods, int identicalPeriods) {
+        List<GetLoansLoanIdRepaymentPeriod> savedPeriods = savedLoanResponse.getRepaymentSchedule().getPeriods();
+        List<GetLoansLoanIdRepaymentPeriod> actualPeriods = actualLoanResponse.getRepaymentSchedule().getPeriods();
+
+        assertEquals(totalPeriods, savedPeriods.size(), "Unexpected number of periods in savedPeriods list.");
+        assertEquals(totalPeriods, actualPeriods.size(), "Unexpected number of periods in actualPeriods list.");
+
+        verifyPeriodsEquality(savedPeriods, actualPeriods, 0, identicalPeriods, true);
+
+        verifyPeriodsEquality(savedPeriods, actualPeriods, identicalPeriods, totalPeriods, false);
+    }
+
+    private void verifyPeriodsEquality(List<GetLoansLoanIdRepaymentPeriod> savedPeriods, List<GetLoansLoanIdRepaymentPeriod> actualPeriods,
+            int startIndex, int endIndex, boolean shouldEqual) {
+        for (int i = startIndex; i < endIndex; i++) {
+            Double savedTotalDue = savedPeriods.get(i).getTotalDueForPeriod();
+            Double actualTotalDue = actualPeriods.get(i).getTotalDueForPeriod();
+
+            if (shouldEqual) {
+                assertEquals(savedTotalDue, actualTotalDue, String.format(
+                        "Period %d should be identical in both responses. Expected: %s, Actual: %s", i + 1, savedTotalDue, actualTotalDue));
+            } else {
+                assertNotEquals(savedTotalDue, actualTotalDue, String
+                        .format("Period %d should differ between responses. Saved: %s, Actual: %s", i + 1, savedTotalDue, actualTotalDue));
+            }
+        }
+    }
+
     protected void verifyRepaymentSchedule(Long loanId, Installment... installments) {
         GetLoansLoanIdResponse loanResponse = loanTransactionHelper.getLoan(requestSpec, responseSpec, loanId.intValue());
         DateTimeFormatter dateTimeFormatter = DateTimeFormatter.ofPattern(DATETIME_PATTERN);
diff --git a/integration-tests/src/test/java/org/apache/fineract/integrationtests/LoanRescheduleRequestTest.java b/integration-tests/src/test/java/org/apache/fineract/integrationtests/LoanRescheduleRequestTest.java
index 2090b7ba7eb..89b8e416703 100644
--- a/integration-tests/src/test/java/org/apache/fineract/integrationtests/LoanRescheduleRequestTest.java
+++ b/integration-tests/src/test/java/org/apache/fineract/integrationtests/LoanRescheduleRequestTest.java
@@ -34,6 +34,7 @@
 import java.util.List;
 import java.util.concurrent.atomic.AtomicReference;
 import org.apache.fineract.client.models.AdvancedPaymentData;
+import org.apache.fineract.client.models.GetLoansLoanIdResponse;
 import org.apache.fineract.client.models.PostClientsResponse;
 import org.apache.fineract.client.models.PostCreateRescheduleLoansRequest;
 import org.apache.fineract.client.models.PostCreateRescheduleLoansResponse;
@@ -369,6 +370,89 @@ public void testCreateLoanRescheduleChangeEMIRequest() {
         this.createLoanRescheduleChangeEMIRequest();
     }
 
+    @Test
+    public void givenProgressiveLoanWithPaidInstallmentWhenInterestRateChangedThenDueAmountUpdated() {
+        PostClientsResponse client = clientHelper.createClient(ClientHelper.defaultClientCreationRequest());
+        Integer commonLoanProductId = createProgressiveLoanProduct();
+
+        AtomicReference<PostLoansResponse> loanResponse = new AtomicReference<>();
+        runAt("2 February 2024", () -> {
+            loanResponse
+                    .set(applyForLoanWithRecalculation(client.getClientId(), commonLoanProductId, "01 January 2024", "01 January 2024"));
+
+            approveAndDisburseLoan(loanResponse.get().getLoanId(), "01 January 2024", BigDecimal.valueOf(100));
+            makeRepayments(loanResponse.get().getLoanId().intValue());
+
+            GetLoansLoanIdResponse savedLoanResponse = loanTransactionHelper.getLoan(requestSpec, responseSpec,
+                    loanResponse.get().getLoanId().intValue());
+
+            PostCreateRescheduleLoansResponse rescheduleLoansResponse = rescheduleLoanWithNewInterestRate(loanResponse.get().getLoanId(),
+                    "2 February 2024", BigDecimal.ONE, "3 February 2024");
+
+            approveLoanReschedule(rescheduleLoansResponse.getResourceId(), "2 February 2024");
+
+            GetLoansLoanIdResponse actualLoanResponse = loanTransactionHelper.getLoan(requestSpec, responseSpec,
+                    loanResponse.get().getLoanId().intValue());
+
+            verifyRepaymentSchedule(savedLoanResponse, actualLoanResponse, 7, 3);
+        });
+    }
+
+    private Integer createProgressiveLoanProduct() {
+        AdvancedPaymentData defaultAllocation = createDefaultPaymentAllocation("NEXT_INSTALLMENT");
+        final String loanProductJSON = new LoanProductTestBuilder().withNumberOfRepayments(numberOfRepayments)
+                .withinterestRatePerPeriod("7").withMaxTrancheCount("10").withMinPrincipal("1").withPrincipal("100")
+                .withInterestRateFrequencyTypeAsYear()
+                .withRepaymentStrategy(AdvancedPaymentScheduleTransactionProcessor.ADVANCED_PAYMENT_ALLOCATION_STRATEGY)
+                .withInterestTypeAsDecliningBalance().addAdvancedPaymentAllocation(defaultAllocation)
+                .withInterestRecalculationDetails("0", "4", "1").withRecalculationRestFrequencyType("2")
+                .withInterestCalculationPeriodTypeAsDays().withMultiDisburse().withDisallowExpectedDisbursements()
+                .withLoanScheduleType(LoanScheduleType.PROGRESSIVE).withLoanScheduleProcessingType(LoanScheduleProcessingType.HORIZONTAL)
+                .build(null);
+        return loanTransactionHelper.getLoanProductId(loanProductJSON);
+    }
+
+    private PostLoansResponse applyForLoanWithRecalculation(Long clientId, Integer loanProductId, String expectedDisbursementDate,
+            String submittedOnDate) {
+        return loanTransactionHelper.applyLoan(new PostLoansRequest().clientId(clientId).productId(loanProductId.longValue())
+                .expectedDisbursementDate(expectedDisbursementDate).dateFormat(DATETIME_PATTERN)
+                .transactionProcessingStrategyCode(AdvancedPaymentScheduleTransactionProcessor.ADVANCED_PAYMENT_ALLOCATION_STRATEGY)
+                .locale("en").submittedOnDate(submittedOnDate).amortizationType(1).interestRatePerPeriod(BigDecimal.valueOf(7))
+                .interestCalculationPeriodType(0).interestType(0).repaymentFrequencyType(2).repaymentEvery(1).numberOfRepayments(6)
+                .loanTermFrequency(6).loanTermFrequencyType(2).principal(BigDecimal.valueOf(100)).loanType("individual"));
+    }
+
+    private void approveAndDisburseLoan(Long loanId, String date, BigDecimal amount) {
+        loanTransactionHelper.approveLoan(loanId, createLoanApprovalRequest(date, amount));
+        loanTransactionHelper.disburseLoan(loanId, createDisbursementRequest(date, amount));
+    }
+
+    private PostLoansLoanIdRequest createLoanApprovalRequest(String date, BigDecimal amount) {
+        return new PostLoansLoanIdRequest().approvedLoanAmount(amount).dateFormat(DATETIME_PATTERN).approvedOnDate(date).locale("en");
+    }
+
+    private PostLoansLoanIdRequest createDisbursementRequest(String date, BigDecimal amount) {
+        return new PostLoansLoanIdRequest().actualDisbursementDate(date).dateFormat(DATETIME_PATTERN).transactionAmount(amount)
+                .locale("en");
+    }
+
+    private void makeRepayments(int loanId) {
+        loanTransactionHelper.makeRepayment("01 February 2024", 17.01f, loanId);
+        loanTransactionHelper.makeRepayment("02 February 2024", 17.01f, loanId);
+    }
+
+    private PostCreateRescheduleLoansResponse rescheduleLoanWithNewInterestRate(Long loanId, String submittedOnDate,
+            BigDecimal newInterestRate, String rescheduleFromDate) {
+        return loanRescheduleRequestHelper.createLoanRescheduleRequest(new PostCreateRescheduleLoansRequest().loanId(loanId)
+                .dateFormat(DATETIME_PATTERN).locale("en").submittedOnDate(submittedOnDate).newInterestRate(newInterestRate)
+                .rescheduleReasonId(1L).rescheduleFromDate(rescheduleFromDate));
+    }
+
+    private void approveLoanReschedule(Long rescheduleId, String approvedOnDate) {
+        loanRescheduleRequestHelper.approveLoanRescheduleRequest(rescheduleId,
+                new PostUpdateRescheduleLoansRequest().approvedOnDate(approvedOnDate).locale("en").dateFormat(DATETIME_PATTERN));
+    }
+
     private PostLoansResponse applyForLoanApplication(final Long clientId, final Integer loanProductId, final BigDecimal principal,
             final int loanTermFrequency, final int repaymentAfterEvery, final int numberOfRepayments, final BigDecimal interestRate,
             final String expectedDisbursementDate, final String submittedOnDate, String transactionProcessorCode,
diff --git a/integration-tests/src/test/java/org/apache/fineract/integrationtests/common/loans/LoanProductTestBuilder.java b/integration-tests/src/test/java/org/apache/fineract/integrationtests/common/loans/LoanProductTestBuilder.java
index 928988db85d..e9439c25922 100644
--- a/integration-tests/src/test/java/org/apache/fineract/integrationtests/common/loans/LoanProductTestBuilder.java
+++ b/integration-tests/src/test/java/org/apache/fineract/integrationtests/common/loans/LoanProductTestBuilder.java
@@ -497,6 +497,11 @@ public LoanProductTestBuilder withDisallowExpectedDisbursements(boolean disallow
         return this;
     }
 
+    public LoanProductTestBuilder withDisallowExpectedDisbursements() {
+        this.disallowExpectedDisbursements = true;
+        return this;
+    }
+
     public LoanProductTestBuilder withFullAccountingConfig(String accountingRule, FullAccountingConfig fullAccountingConfig) {
         this.accountingRule = accountingRule;
         this.fullAccountingConfig = fullAccountingConfig;
@@ -640,6 +645,11 @@ public LoanProductTestBuilder withInterestRecalculationRestFrequencyDetails(fina
         return this;
     }
 
+    public LoanProductTestBuilder withRecalculationRestFrequencyType(final String recalculationRestFrequencyType) {
+        this.recalculationRestFrequencyType = recalculationRestFrequencyType;
+        return this;
+    }
+
     public LoanProductTestBuilder withInterestRecalculationCompoundingFrequencyDetails(final String recalculationCompoundingFrequencyType,
             final String recalculationCompoundingFrequencyInterval, final Integer recalculationCompoundingFrequencyOnDayType,
             final Integer recalculationCompoundingFrequencyDayOfWeekType) {