Setting up Loans

How to Setup a Loan:

1. Select the loan account's Overview View and the "Schedule" button from the middle bar.
2. Click the "Adjust" button underneath the schedule table.
3. Answer the 5 questions on the initial "Loan Setup" view.
   (1) Are You Borrowing or Lending?
   (2) Have any Payments been Made?
   (3) Is the Interest Rate Fixed or Variable?
   (4) Does the Loan have a Balloon Payment?
   (5) What Type of Amortization is Used?
4. Depending on the answers to the questions you supplied in Step 1 you will either be shown a "Simple" or an "Advanced" "Loan Payment Details" sheet to fill out.
   
   For both the "Simple" and "Advanced" versions fill in all the fields to the best of your ability and any values not entered will be calculated based on the values you did enter. Also, make sure the "Payment Transaction Type" selected allows the payments to have either the positive or negative value associated with the payment for the type of loan being setup (see note below). Don't forget to set the "Add Past Payments" and "Automatically Add Payments" checkboxes to your preferences. If you check "Automatically Add Payments" all future transactions will be added without any further notice/permission from you otherwise you will be prompted to accept/decline these transactions when they are set to occur.
   
   The "Advanced" version allows you to add as many "Payment Segments" as you need over the life of the loan. Each "Payment Segment" is different from the one before it in either interest rate or payment amount. The last "Payment Segment" is set to automatically calculate the proper amount to close out the loan (in number of periods and amount of the loan). The use of payment segments is intended to make entering the expected loan payment schedule easier by allowing users to enter one segment to represent multiple consecutive payments that have the same attributes (interest, principal and other amount). The changes to the loan attributes either past or future result in the need for additional segments. When entering payments that are different than the expected calculated amount (the amount based on the loan's attributes) you can uncheck the "Auto Calculate the Selected Regular Payment" with the desired segment selected to keep the payment amount from being calculated for you.
   
   Once you are satisfied with the values entered and calculated click "Next".
5. The next "Loan Summary" view shows a summary details of your loan. The "Details" tab shows general summary info about the loan and the "Schedule" tab shows your payment schedule for the entire life of the loan if everything goes as expected. Select the "Finish" button when you are ready and you're done!

Notes:

• Make sure you are using a "Payment Transaction Type" that allows the payments to have either positive or negative value associated with the type of loan (need types that allow postivie values for loans where you are the borrower and types that allow negative values for loans where you are the lender). See Default Transaction Types for more info.
• The "Other" payment option and category is for payments made to the loan holder that do not apply to the loan's principal or interest. "Other" payments are intended for items such as PMI, property tax, and escrow amounts. You can also indicate that this "Other" payment is a transfer to another account, such as an escrow account, by setting the "Other Payment Category" to be that account (the account's name in brackets).
• At any time you can come back and adjust your loan following the instructions above (in case some parameter of your loan changes). Just make sure to set the proper desired value for the "Add Past Payments" checkbox.
• Setting up an amortization schedule creates a recurring transaction that will occur on the loan payment dates. This recurring transaction will post the transaction in the loan account for the interest accrued for the loan period, the loan payment to the loan account, and the corresponding transfer transaction in the account that is associated with the loan as the "Paid From Account". If there is an "Other" payment setup then this transaction will also post in the loan account. If the "Other" payment is a transfer to another account that transaction will also be created for that account.

Example of a Setting Up a Loan With Variable Interest Rates:
For example, you have a loan for $1,200 for 12 months and a zero interest for six months and a 5% interest rate for the last six months.

1. Select the loan account's Overview View and the "Schedule" button from the middle bar.
2. Click the "Adjust" button underneath the schedule table.
3. Answer the 5 questions on the initial "Loan Setup" view.
   (1) Are You Borrowing or Lending? - Borrowing
   (2) Have any Payments been Made? - No
   (3) Is the Interest Rate Fixed or Variable? - Variable
   (4) Does the Loan have a Balloon Payment? - No
   (5) What Type of Amortization is Used? - Typical Loan/Mortgage
4. Then click "Next" and you will be presented with the "Loan Payment Details (Advanced)" view.
5. Enter -1,200.00 for the initial loan amount.
6. Enter 0.0 for the initial interest rate.
7. Enter 12 for the total number of payments.
8. Set the date of the first payment.
9. Set the frequency of payments to "Monthly".
10. Set the paid from account to be the account the payment is made from (such as a bank account).
11. Set the payment transaction type to be "Transfer".
12. Enter a category for interest such as "Interest Expense".
13. Now in the "Payment Schedule" table you need to create two payment segments by clicking the "+" button underneath the table.
14. Select the first payment segment and set the Start # to 1 and the End # to 6. The first loan payment segment should already have its regular payment set to -100.00. (since the "Auto Calculate the Selected Regular Payment" check box is checked for the payment segment by default).
15. Select the second payment segment and set the Start # to 7 and the End # to 12 (should have been done automatically).
16. Then set the second payment segment to have the interest rate of 5% (enter 0.05). This will appropriately set the loan payment based on the interest rate and outstanding principal to be -101.46 (since the "Auto Calculate the Selected Regular Payment" check box is checked for the payment segment by default).
17. Now your loan amortization schedule is setup and you can select "Next" to view its summary and confirm to accept the new loan amortization schedule by clicking "Finish" and you're done!

Example of a Adjusting a Loan to Have a Different Payment or Interest Rate:
For example, you have a 12 month loan for $1,200 with a zero interest rate (for simplicity) that you have been paying $150.00 a month for the first six months and will now pay $51.47 a month and have a 10% interest rate for the last six months.

1. Select the loan account's Overview View and the "Schedule" button from the middle bar.
2. Click the "Adjust" button underneath the schedule table.
3. Answer the 5 questions on the initial "Loan Setup" view.
   (1) Are You Borrowing or Lending? - Borrowing
   (2) Have any Payments been Made? - Yes
   (3) Is the Interest Rate Fixed or Variable? - Variable
   (4) Does the Loan have a Balloon Payment? - No
   (5) What Type of Amortization is Used? - Typical Loan/Mortgage
   You need to choose that a variable interest rate is used in order to go to use the advanced loan setup option.
4. Then click "Next" and you will be presented with the "Loan Payment Details (Advanced)" view.
5. Enter -1,200.00 for the initial loan amount.
6. Enter 0.0 for the initial interest rate.
7. Enter 12 for the total number of payments.
8. Set the date of the first payment.
9. Set the frequency of payments to "Monthly".
10. Set the paid from account to be the account the payment is made from (such as a bank account).
11. Set the payment transaction type to be "Transfer".
12. Enter a category for interest such as "Interest Expense".
13. Now in the "Payment Schedule" table you need to create two payment segments by clicking the "+" button underneath the table.
14. Select the first payment segment and set the Start # to 1 and the End # to 6.
15. With the first payment segment selected uncheck the "Auto Calculate the Selected Regular Payment" check box to keep it from automatically calculating the payment based on the loan's attributes.
16. Set the first payment segment's regular payment to be -150.00. Remember the negative sign since it is a payment.
17. Select the second payment segment and set the Start # to 7 and the End # to 12 (should have been done automatically).
18. Set the second payment segment's "Interest Rate" to 10%.
19. Then the second payment segment should have already have the loan's regular payment set based on the interest rate and outstanding principal to be -51.47 (since the "Auto Calculate the Selected Regular Payment" check box is checked for the payment segment by default).
20. Now your loan amortization schedule is setup and you can select "Next" to view its summary and confirm to accept the new loan amortization schedule by clicking "Finish" and you're done!

Note: An additional "Payment Segment" is required to record any single payment or group of payments that has different attributes (interest rate, payment amounts).

Example of a Setting Up a Loan With Different Payments:
For example, you have a 12 month loan for $1,200 with a zero interest rate (for simplicity) that you plan on paying $150.00 a month for the first six months and $50.00 a month for the last six months.

1. Select the loan account's Overview View and the "Schedule" button from the middle bar.
2. Click the "Adjust" button underneath the schedule table.
3. Answer the 5 questions on the initial "Loan Setup" view.
   (1) Are You Borrowing or Lending? - Borrowing
   (2) Have any Payments been Made? - Yes
   (3) Is the Interest Rate Fixed or Variable? - No
   (4) Does the Loan have a Balloon Payment? - No
   (5) What Type of Amortization is Used? - Typical Loan/Mortgage
   You need to choose that payments have been made in order to use the advanced loan setup option.
4. Then click "Next" and you will be presented with the "Loan Payment Details (Advanced)" view.
5. Enter -1,200.00 for the initial loan amount.
6. Enter 0.0 for the initial interest rate.
7. Enter 12 for the total number of payments.
8. Set the date of the first payment.
9. Set the frequency of payments to "Monthly".
10. Set the paid from account to be the account the payment is made from (such as a bank account).
11. Set the payment transaction type to be "Transfer".
12. Enter a category for interest such as "Interest Expense".
13. Now in the "Payment Schedule" table you need to create two payment segments by clicking the "+" button underneath the table.
14. Select the first payment segment and set the Start # to 1 and the End # to 6.
15. With the first payment segment selected uncheck the "Auto Calculate the Selected Regular Payment" check box to keep it from automatically calculating the payment based on the loan's attributes.
16. Set the first payment segment's regular payment to be -150.00. Remember the negative sign since it is a payment.
17. Select the second payment segment and set the Start # to 7 and the End # to 12 (should have been done automatically).
18. Then the second payment segment should have already have the loan's regular payment set based on the interest rate and outstanding principal to be -50.00 (since the "Auto Calculate the Selected Regular Payment" check box is checked for the payment segment by default).
19. Now your loan amortization schedule is setup and you can select "Next" to view its summary and confirm to accept the new loan amortization schedule by clicking "Finish" and you're done!

Example of a Setting Up an Existing Loan:
For example, you have an existing 12 month loan for $1,200 with a zero interest rate (for simplicity) that had its first payment six months ago

1. Select the loan account's Overview View and the "Schedule" button from the middle bar.
2. Click the "Adjust" button underneath the schedule table.
3. Answer the 5 questions on the initial "Loan Setup" view.
   (1) Are You Borrowing or Lending? - Borrowing
   (2) Have any Payments been Made? - Yes
   (3) Is the Interest Rate Fixed or Variable? - Fixed
   (4) Does the Loan have a Balloon Payment? - No
   (5) What Type of Amortization is Used? - Typical Loan/Mortgage
4. Then click "Next" and you will be presented with the "Loan Payment Details (Advanced)" view.
5. Enter -1,200.00 for the initial loan amount.
6. Enter 0.0 for the initial interest rate.
7. Enter 12 for the total number of payments.
8. Set the date of the first payment to be six months ago.
9. Set the frequency of payments to "Monthly".
10. Set the paid from account to be the account the payment is made from (such as a bank account).
11. Set the payment transaction type to be "Transfer".
12. Enter a category for interest such as "Interest Expense".
13. Now in the "Payment Schedule" table you only need to create one payment segment by clicking the "+" button underneath the table.
14. Select the single payment segment and set the Start # to 1 and the End # to 12 (should have been done automatically).
15. The single payment segment's regular payment will automatically be set based on the interest rate and outstanding principal to -100.00 (since the "Auto Calculate the Selected Regular Payment" check box is checked for the payment segment by default).
16. Since payments have already been made make sure to uncheck the "Add Past Payments" check box on the bottom left to prevent the loan setup to add payments that have already been made to the account's list of transactions. If you are creating the loan account for the first time you would want to add the past payments.
17. Now your loan amortization schedule is setup and you can select "Next" to view its summary and confirm to accept the new loan amortization schedule by clicking "Finish" and you're done!

Example of a Setting Up an Interest Only Loan:
For example, you have a 12 month loan for $1,200 at a 5% interest rate and you only pay interest on the loan for the twelve months until the loan ends.

1. Select the loan account's Overview View and the "Schedule" button from the middle bar.
2. Click the "Adjust" button underneath the schedule table.
3. Answer the 5 questions on the initial "Loan Setup" view.
   (1) Are You Borrowing or Lending? - Borrowing
   (2) Have any Payments been Made? - No
   (3) Is the Interest Rate Fixed or Variable? - Variable
   (4) Does the Loan have a Balloon Payment? - Yes
   (5) What Type of Amortization is Used? - Typical Loan/Mortgage
4. Then click "Next" and you will be presented with the "Loan Payment Details (Advanced)" view.
5. Enter -1,200.00 for the initial loan amount.
6. Enter 0.05 for the initial interest rate.
7. Enter 12 for the total number of payments.
8. Set the date of the first payment.
9. Set the frequency of payments to "Monthly".
10. Set the paid from account to be the account the payment is made from (such as a bank account).
11. Set the payment transaction type to be "Transfer".
12. Enter a category for interest such as "Interest Expense".
13. Now in the "Payment Schedule" table you need to create two payment segments by clicking the "+" button underneath the table.
14. Select the first payment segment and set the Start # to 1 and the End # to 11.
15. With the first payment segment selected uncheck the "Auto Calculate the Selected Regular Payment" check box to keep it from automatically calculating the payment based on the loan's attributes.
16. Set the first payment segment's regular payment to be -5.00 (the interest on the loan for each period). Remember the negative sign since it is a payment.
17. Select the second payment segment and set the Start # to 12 and the End # to 12 (should have been done automatically).
18. Then set the second payment segment to have the interest rate of 5% (enter 0.05). This will appropriately set the loan's regular payment based on the interest rate and outstanding principal to -1,205.00 (since the "Auto Calculate the Selected Regular Payment" check box is checked for the payment segment by default).
19. Now your loan amortization schedule is setup and you can select "Next" to view its summary and confirm to accept the new loan amortization schedule by clicking "Finish" and you're done!