Update using 2 tables

[PAVB]

Something like this perhaps?

update loans l
set    l.status = 'PAID'
where  l.loan_mount <=
          (
          select   sum(p.payment_amount)
          from     payments p
          where    l.empid = p.empid
          and      l.loan_type = p.loan_type
          group by p.empid,p.loan_type
          )
;

Note: Code was not tested, sorry, have real work on my plate