Why is interest on a loan payment deducted from the balance of the loan?

emikej
emikej Member
This is the first payment on a new mortgage account I set up. I split the principal & interest in categories, but the balance reflects the full amount of payment.

Best Answer

  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    Accepted Answer
    In the split payment, what categories are used for:
    1. Transfer of principal to the loan (to reduce loan amount)
    2. Expense of interest
    3. Any other amounts in the payment (such as escrow)
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP

Answers

  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    Accepted Answer
    In the split payment, what categories are used for:
    1. Transfer of principal to the loan (to reduce loan amount)
    2. Expense of interest
    3. Any other amounts in the payment (such as escrow)
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • emikej
    emikej Member
    Thanks. I split the payment and only transferred the principal. All is well.
This discussion has been closed.