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Manage Loans in Quicken

Updated: 5/07/2012 | Article ID: GEN82490

You can track several different types of loans with Quicken, including loans with balloon payments or loans with zero interest. You can easily pay ahead on the loan principal and have Quicken recalculate your payment schedule for you. When tax time rolls around, you can determine easily exactly how much interest you paid during the year. Click a link below for a brief overview of the topics covered in this section.

  • Set up a loan

    Use Loan Setup to add a new Quicken account to track your new or existing loan. You can track loans for money you've borrowed or money you've lent.

    When you set up a loan for money you've borrowed, Quicken asks for basic information about your loan, such as the amount owed, length of the loan, interest rate, and payment method. Then Quicken creates a liability account to track how much you owe. If you are taking out a loan to purchase something that has significant resale value, such as a house, Quicken's house account type will also create an asset account to track that resale value.

  • Make loan payments
    After you set up a loan, you tell Quicken how you want to make loan payments. You can enter the loan payment when it is due, have Quicken enter the payment into the register for you, or have Quicken make each payment online. You can enter loan payments directly in the register, or you may prefer to make payments from the View Loans window, where you can see all the information associated with the payment. Regardless of how you make loan payments, Quicken records the categories you specified for each part of the payment when you set up the loan and tracks the current balance of your loan in the liability account. If there is an associated asset account, Quicken also tracks the current value of the asset, based on the amount of the loan payment that goes toward the loan principal.
  • Make additional prepayments of principal
    A good way to reduce the amount of interest you have to pay on a loan is to pay ahead on the principal; in other words, make additional payments that go solely toward paying back the amount of your loan. When you do this, Quicken will automatically recalculate the payment schedule, as well as the amounts of principal and interest you now need to pay.
  • Adjust the interest rate on a loan

    If the loan you set up in Quicken has a variable interest rate, at some point the rate will change. When you change the rate in Quicken, the scheduled payment amount also changes.

    To ensure that the payment schedule is updated accurately, adjust the interest rate at any time between your last payment at the old rate and the time your next payment at the new rate is due.

  • View the payment schedule for a loan
    Each time you record an amortized loan payment in your Quicken register, Quicken updates the payment schedule to show your new balance. You can view the payment schedule to see how much of your payment goes to interest and how much goes to principal. You can also see how much you've paid in principal and interest so far by checking the running totals.
  • Handle different types of loans
    Sometimes loans have specialized terms. Quicken can help you track loans with negative amortization, as well as zero-interest loans and loans for which you receive payment. In the latter case, where you hold a loan note and receive payments for a loan, you can set up your loan so that Quicken amortizes it. Quicken creates a memorized loan deposit instead of a payment and uses an asset account instead of a liability account to track how much the borrower still owes you.
  • Refinance a loan

    If you plan to refinance a loan you've been tracking in Quicken, you need to set up a new loan and pay off the old loan.

    You can delete the old loan if you want, but that removes all information about it from your Quicken data file. This means you can't include it in reports.

  • Track interest, property taxes, and other fees included in a loan
    You can track interest, property taxes, and other fees included in a loan by splitting your loan payment transactions. For example, you can track items like insurance or interest by using an expense category such as Insurance or Insurance:Fire.
 
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