diff --git a/.gitignore b/.gitignore
new file mode 100644
index 0000000..6c56ff1
--- /dev/null
+++ b/.gitignore
@@ -0,0 +1,2 @@
+__pycache__/
+.pytest_cache/
diff --git a/bank.py b/bank.py
index ab74f6f..a89fd85 100644
--- a/bank.py
+++ b/bank.py
@@ -45,9 +45,18 @@ def calculate_total_assets(self):
         pass
 
     
-    def process_loan_payments(self):
-        # Processes loan payments by deducting the installment amount from the balance.
-        pass
+    def process_loan_payments(self):
+        # Processes loan payments by deducting the installment amount from the balance.
+        for loan in self.loans:
+            if loan.tenure <= 0 or loan.remaining_balance <= 0:
+                continue
+
+            installment = min(loan.remaining_balance, loan.amount / loan.tenure)
+            for account in self.accounts:
+                if account.account_number == loan.account_number and account.balance >= installment:
+                    account.balance -= installment
+                    loan.remaining_balance -= installment
+                    break
 
 
 class Account:
diff --git a/test_process_loan_payments.py b/test_process_loan_payments.py
new file mode 100644
index 0000000..2bf61fd
--- /dev/null
+++ b/test_process_loan_payments.py
@@ -0,0 +1,40 @@
+from bank import Account, Bank, Loan
+
+
+def test_process_loan_payments_deducts_installment_and_reduces_remaining_balance():
+    bank = Bank("Test Bank")
+    account = Account("ACC-1", "Alice", 200.0)
+    loan = Loan("LOAN-1", "ACC-1", 120.0, 5.0, 12)
+    bank.accounts.append(account)
+    bank.loans.append(loan)
+
+    bank.process_loan_payments()
+
+    assert account.balance == 190.0
+    assert loan.remaining_balance == 110.0
+
+
+def test_process_loan_payments_skips_accounts_with_insufficient_balance():
+    bank = Bank("Test Bank")
+    account = Account("ACC-2", "Bob", 5.0)
+    loan = Loan("LOAN-2", "ACC-2", 120.0, 5.0, 12)
+    bank.accounts.append(account)
+    bank.loans.append(loan)
+
+    bank.process_loan_payments()
+
+    assert account.balance == 5.0
+    assert loan.remaining_balance == 120.0
+
+
+def test_process_loan_payments_skips_loans_with_non_positive_tenure():
+    bank = Bank("Test Bank")
+    account = Account("ACC-3", "Charlie", 100.0)
+    loan = Loan("LOAN-3", "ACC-3", 100.0, 5.0, 0)
+    bank.accounts.append(account)
+    bank.loans.append(loan)
+
+    bank.process_loan_payments()
+
+    assert account.balance == 100.0
+    assert loan.remaining_balance == 100.0