How do I categorize my monthly Auto Loan bank pymt.

evilwargs
evilwargs Member
I have my auto loan setup as an Express Web Connect account. The balances and P/I are correct from the downloaded auto loan account. I don't use Quicken Bill Pay & accept bank transactions, then review the categories for correctness. How to I categorize my monthly bank auto loan payments? If I categorize to the Auto Loan account, it will duplicate what I get from the downloaded activity from the auto loan account. Something I'm missing???

Best Answer

  • Boatnmaniac
    Boatnmaniac SuperUser ✭✭✭✭✭
    edited January 10 Answer ✓
    Hi @evilwargs .  Quicken's preference is to give users good options to use regardless of whether that preference is for automatic download or for manual entry. 
    The manual loan option is designed so that:
    • The amortization schedule will be calculated during the set up process and can be accessed from the loan account register view.
    • During the manual loan account set up process Quicken will generate a Loan Payment Reminder with a split category for principal and interest.  Each month when the Reminder gets entered (as a credit in the loan account register and as a debit in your checking account) Quicken will enter the amortized principal and interest payments into the splits.
    • When the payment downloads from your bank Quicken will likely automatically match the payment to the Reminder transaction that was previously entered.  If it does not then you should be able to manually match the downloaded payment to the entered reminder.
    So, there is no need to set up a Bill Reminder outside of the loan set up process because it will do that for you.
    (QW Premier Subscription: R39.23 on Windows 10)

Answers

  • Boatnmaniac
    Boatnmaniac SuperUser ✭✭✭✭✭
    Since you connected your loan with the lender your only option when the loan payment downloads from the bank is to categorize it as an expense, not as a transfer.  I believe there is a default category for this...Auto:Auto Payment or you can create a custom category for it if you wish.
    If you want to be able to link auto payments downloaded from the bank to the auto loan (via a transfer category) you will need to change your auto loan to a manual loan.  You can read up on how to do that at https://community.quicken.com/discussion/7164936/faq-how-do-i-convert-a-loan-account-that-automatically-downloads-transactions-to-a-manual-entry-sc..
    There are pros and cons to both methods and it's a personal choice as to which method you want to use. 
    I think people who are not so interested in tracking all the details (such as, which payment in checking went to pay which loan account or seeing all the loan register details) are more inclined to set up the loan account like you did by linking it to the lender.  The disadvantage is such connected loans do not have account registers so you cannot make adjustments to prinicipal/interst, extra principal payments, etc., in the loan account.
    I and I think most Super Users prefer to set up the loans as manual accounts that are not connected to the lender.  Manual accounts do have account registers and that allows us to link a loan payment directly to the loan account via a transfer category and to make adjustments/corrections in the register if/when needed.
    (QW Premier Subscription: R39.23 on Windows 10)
  • evilwargs
    evilwargs Member
    Thanks, Boatn. It seems like Quicken would like to have folks connect automatically to accounts like Express Web Connect that I've done. However, you're indicating that the preferred way that most users prefer is to connect manually. I'm primarily interested in categorizing my transactions from banks and credit cards to some account, like a loan or somewhere... I follow what you indicating regarding the choice to setup manually or direct and the implications. What I'm interested in understanding is if I choose to use manual account, is there a way to somehow incorporate the loan amortization schedule from the account to have Quicken know the interest/principal split when the bank payment is made. Can I use reminders?... I don't use bill pay and accept the downloaded activity, and then review transactions. Thanks for anyone's help... B)
  • evilwargs
    evilwargs Member
    Also.... Is there a way to post/record the Principal portion (or total pymt) to a category that will capture spending cash (Principal and Interest) in reports when I'm using the manual loan approach described?
  • Boatnmaniac
    Boatnmaniac SuperUser ✭✭✭✭✭
    edited January 10 Answer ✓
    Hi @evilwargs .  Quicken's preference is to give users good options to use regardless of whether that preference is for automatic download or for manual entry. 
    The manual loan option is designed so that:
    • The amortization schedule will be calculated during the set up process and can be accessed from the loan account register view.
    • During the manual loan account set up process Quicken will generate a Loan Payment Reminder with a split category for principal and interest.  Each month when the Reminder gets entered (as a credit in the loan account register and as a debit in your checking account) Quicken will enter the amortized principal and interest payments into the splits.
    • When the payment downloads from your bank Quicken will likely automatically match the payment to the Reminder transaction that was previously entered.  If it does not then you should be able to manually match the downloaded payment to the entered reminder.
    So, there is no need to set up a Bill Reminder outside of the loan set up process because it will do that for you.
    (QW Premier Subscription: R39.23 on Windows 10)
  • Boatnmaniac
    Boatnmaniac SuperUser ✭✭✭✭✭
    edited January 10
    evilwargs said:
    Also.... Is there a way to post/record the Principal portion (or total pymt) to a category that will capture spending cash (Principal and Interest) in reports when I'm using the manual loan approach described?
    The interest paid will be automatically categorized and therefore it will show up in reports....nothing for you to do other than pull up the report. 
    The principal amount will show up in reports as Transfers from the checking account to the loan account.  This is because principal payments represent a reduction in assets as well as a reduction in debt.  They really are not an expense in the classic definition of "expense" like the amount of interest paid is an expense.
    (QW Premier Subscription: R39.23 on Windows 10)
  • evilwargs
    evilwargs Member
    Thanks, but I was not referring to an Income/Expense report, but more interested in a cash flow report. i.e. How much cash did I take in and how much went out (and where did it go?)
  • Boatnmaniac
    Boatnmaniac SuperUser ✭✭✭✭✭
    Yes, the loan payments will show up in the Cash Flow report.  But the principal and the interest will show up in 2 different sections of the report.  The interest will show up in the Expense section and the principal will show up in the Transfers Out section as outflow to the specific loan account.
    The default Cash Flow report does not include transfers it can very easily be customized (within seconds) to include transfers.
    (QW Premier Subscription: R39.23 on Windows 10)
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