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How To Set Up a Loan

Updated: 5/08/2012 | Article ID: GEN82491

  1. On your keyboard, hold down Ctrl+Shift+H. Quicken displays the View Loans window.
  2. On the View Loans toolbar, click New.

    Quicken opens the Loan Setup wizard to guide you through the process of setting up a loan.

    • Click Next and Back to move forward and backward through the pages of the wizard.
    • Click the Summary tab to skip the questions and fill out several options at once.
  3. As you set up your loan, you may need more information. Check the title at the top of the Loan Setup window, then click the matching topic below to learn more.
    • What type of loan is this?

      Select the type of loan you want to set up. You can set up a loan to borrow money for yourself or to lend money to someone else. In either case, Quicken calculates the payments based on the rest of the information that you enter.

      If you are lending money to others, you cannot include such a loan in the planning tools that come with Quicken (for example, the Retirement Planner and the Home Purchase Planner).

    • Choose a Quicken account for this loan

      Select the account you want to link your loan payments to. To use a new account, click New Account and enter a name. Quicken creates the account for you.

      If you've already created a liability account to track money you're borrowing or an asset account to track money you're lending, click Existing Account and select the name from the list.

    • Have any payments been made on this loan?

      Tell Quicken whether you've already made or received any payments on the loan, so Quicken can calculate your remaining payments.

      Quicken calculates the remaining payments in different ways, depending on whether you've already made payments on the money you borrowed or not (or received payments on the money you lent).

    • Enter the initial loan information

      Tell Quicken the date you opened the loan and the original amount of the loan.

      If your loan is:

      • A new bank loan, enter the loan amount in Original Balance. Quicken inserts today's date in Opening Date, but you can change it.
      • An existing bank loan and you don't want to enter all previous loan payments into Quicken, enter the original balance of the loan in Original Balance, and enter the date on which you first took out the loan in Opening Date.
      • An existing bank loan and you want to have a complete record of all previous payments, complete this loan setup procedure, and then enter all previous payments in your checking account. We don't recommend such a detailed setup because the payment schedule created by Quicken doesn't need this historic data.
    • Does this loan include a balloon payment at the end?

      Tell Quicken if this loan includes a balloon payment at the end.

      In some balloon payment loans, each payment covers only the accrued interest (without affecting the principal), and the original loan amount is due at the end of the repayment period. This is a nonamortized, or interest-only, loan. If you have an interest-only loan:

      • Tell Quicken here that you have a balloon payment.
      • In the next two pages of the Loan Setup wizard, enter the same period for original length and amortized length.
      • Enter the payment amount when you're prompted for it.
    • Enter the payment period for this loan
      Specify the length of the loan.
      • From the drop-down list, select a unit of time (Years, Months, or Weeks) for the length of the loan. If the loan is calculated only by the number of payments made, choose Payments.
      • Enter the number of years, months, weeks, or payments on the loan, and then click Next. If this is an interest-only loan, enter the original length of the loan here. Then enter the same period for the amortized length in the next page.
      The original length of the loan refers to the period of time during which payments are due, starting from the date the loan was opened until the date the last payment is due.
    • Enter the amortized length of the loan (balloon payments only)

      This screen appears if you indicated previously that this loan has a balloon payment. In this step, Quicken needs to know the amortized length of the loan. (If you do not have a balloon payment, go to the next step.)

      • If you know the amortized length of the loan, choose a unit of time (Years, Months, Weeks, or Payments) and enter the number of these units.
      • If you don't know the amortization information, click Please Calculate the Amortized Length for Me.
      • If this is an interest-only loan, enter the same period here that you entered for the original length of the loan.
    • Enter the original length of the loan

      Tell Quicken how often you make payments.

      Click the drop-down list and select the standard period that matches your loan. Semimonthly payments are due twice a month. Bi-monthly payments are due every other month.

      If none of the Standard Period settings match your loan, select Other Period and enter the number of payments required per year.

    • Enter the compounding period for this loan

      Tell Quicken how often your loan is compounded. Select Daily, Monthly, or Semi-Annually from the drop-down list.

      The compounding period affects how much interest is owed on a loan. The more frequently the interest is calculated, the higher the total interest is.

    • Do you know the current balance of this loan?

      Tell Quicken whether or not you know the current balance of your loan.

      The current balance on the loan is the total amount you still owe. If you don't know how much you owe, click No. Otherwise, click Yes to see a page where you can enter the date and the amount.

    • Enter the current balance information
      Provide your current balance information.
      • If you've told Quicken that you don't know the current balance information, go to the next step.
      • In the Current Balance Date field, enter the most recent date for which you know the loan amount due.
      • In the Current Balance Amount field, enter the amount due on the loan, as of the date you entered above.
    • Enter the date of the next payment

      Enter the date the next payment is due.

      You can enter the date or click the pop-up calendar to the right of the field and use it to choose the date.

    • Do you know the amount of the first (or next) payment?

      Tell Quicken whether or not you know the amount of your next payment.

      The amount of the next payment refers to the total principal and interest combined. If you don't know this amount, click No. Otherwise, click Yes to see a page where you can fill in the amount.

      If this is an interest-only loan, click Yes and enter the payment amount in the next page.

    • Enter the amount of principal and interest in the next payment
      Enter the amount of your next payment.
      • Include your regular payment plus any extra you plan to add if you want to pay off the loan early.
      • Don't include fees, as explained by the Loan Setup wizard.
      • If this is an interest-only loan, enter the payment amount.
    • Enter the interest rate for this loan
      Enter the interest rate that will be in effect for the next payment.
      • If the loan is an adjustable-rate loan, you can change the amount at any time in the Edit Payment dialog.
      • You don't have to enter the percent sign.
    • Summary

      Confirm that the information you entered is correct.

      • Use the Summary pages to double-check the information you entered. Change the information if necessary, and then click Next.
      • When you are finished in the Summary, click Done.

        Quicken displays the Set Up Loan Payment dialog.

      • Set up your loan payments.
      • Click OK. Quicken asks if you'd like to set up an asset account to track the value of the item you're purchasing with the money you've borrowed. This makes net worth reports more accurate.
      • If you'd like to set up an account, click Yes and follow the instructions. If you don't need an asset account, click No.

        Quicken displays your loan in the Property & Debt Center.

Notes

If you used the amortization feature in Quicken 1 or Quicken 2 for Windows but didn't set up an account for tracking principal, Quicken for Windows now sets up the account for you. Quicken enters the correct opening balance and current balance according to the amortized state of your loan.

 
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